Where Did The Shoah Money Go? [ 12 October 2006 ]
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First Class flights
around the world, accommodation at deluxe hotels, dining at fancy
restaurants and a series of credit cards, this is how the Claims Conference,
which deals with restitution of stolen Jewish property from the Holocaust,
operates. Conference president was involved in financial irregularities in
his previous position, but spokesmen for the organizations say: There were
no criminal findings against him; he gets impressive results for the
survivors
N., a Holocaust survivor
suffering from cancer, aged 63, sits in her home in Haifa and still relives
the katyusha rockets from the recent war. "I stayed in my building alone.
There was no other living soul", she recollects, "Everyone left and when the
katyusha rockets landed on my house, all my illnesses deteriorated.
"I live in an Amidar apartment, spend thousands of shekels on medication and I have nothing to eat. I telephoned organizations who are supposed to help Holocaust victims and the Claims Conference and asked for some help from, but they waved me off."
After the war, N. approached the Claims Conference in the United States. "People said to me that I will be able to get some help, but they transferred me from telephone to telephone, from America to Frankfurt and finally said 'Madam, these kinds of requests are handled in Israel'. But here they sent me home. They said I am too young and that they only help survivors over the age of 75.
"I was born during the Holocaust; I suffered in the camps from the day I was born, I was sick, but the organization which is supposed to care for Holocaust victims and has two billion dollars in its accounts, needs the money for other purposes and is not prepared to help me. The Nazis murdered my family and stole our property, but the executives of the Claims Conference are their heirs?
N. is one of thousands of needy Holocaust survivors living in Israel.
The Claims Conference, which receives money for stolen property on behalf of the Jewish people, only provides these people with minimal assistance. The many millions flow to organizations which are not directly identified with Holocaust survivors.
The Claims Conference was set up in 1951 at the initiative of the Government of Israel to represent Diaspora Jews in negotiations for reparations with Germany. The management of the organization is composed of representatives of 23 Jewish organizations, which were selected
by Nahum Goldman, then president of the World Jewish Congress.
In the beginning of the nineties, the role of Israel in the Claims Conference diminished further and American Jews assumed control of the Claims Conference. At the end of that decade, the Claims Conference became one of the richest Jewish bodies in the world. Today, the organization, based in New York, has in it is accounts, more than 1.7 billion dollars. A large portion of this amount was received after the unification of Germany.
The German Government recognized the Claims Conference as the heir to Jewish property in East Germany and it was awarded 11,000 claims for restitution of property. Even today, the Claims Conference continues to claim restitution of Jewish property and it is estimated that in the next few years, the Claims Conference will receive another 400 million dollars.
So where do a large proportion of these funds go and why are survivors who are destitute, sick and living in dire circumstances, not able to benefit from them?
IRS reports show that there are 100 employees of the Claims Conference who enjoy salaries of close to 6.9 million dollars. Add to this the lavish spending of money which could otherwise be used to save Holocaust survivors from becoming destitute: The heads of the Claims Conference enjoy many benefits, including first class travel around the world, deluxe hotel accommodation and dining at fancy restaurants.
The extent of management expenses of the organization are tens of millions
of dollars each year. The World Jewish Congress funds expenses relating to
restitution of money to Holocaust survivors.
Claims Conference President Israel Singer (Archive photo: AP)
The financial reports reveal that each year, the organization distributes approximately 90 million dollars. In 2005, for example, a larger amount was transferred: 127 million dollars. Eighty percent of these distributions are allocated for the welfare of the survivors and 20 percent are allocated for educational, remembrance and research purposes.
In reality, not enough money actually reaches the survivors. Substantial amounts are transferred to organizations such as Gur Hassidim, the Jewish Agency, other organizations affiliated with Agudat Israel and more. And it is not clear that the money reaches the proper destination. For example, an American Ambulance organization receives funding and certain hospitals in Israel receive funding, even though they do not provide any preferential treatment to Holocaust survivors.
Last week, a coalition of Israel organizations was formed, led by the Minister for pension affairs, Rafi Eitan, who is also responsible for ties with the Diaspora. It is demanding that changes be made to the composition of the management of the Claims Conference to ensure that half of the executive shall comprise Israelis representing the survivors.
Today, the majority of the management of the Claims Conference are representatives of American Jewry. Eitan says: "The composition of the Claims Conference has not changed since it was formed when there were only one and a half million people living in Israel. Israel has since become home for six million Jews and most Holocaust survivors have immigrated to Israel.
The structure of the Claims Conference must be changed accordingly and Israel must become an equal partner in order to oversee the allocation of funds. Unfortunately, the Claims Conference refuses to allow this so that they can do whatever they want."
So who is the President of the Claims Conference, Israel Singer, and why do so many people object to the manner in which he operates?
Singer, 62, has been engaged for many years in public activities and served until 2001 as Secretary General of the World Jewish Congress, but stepped down from his role after allegations of his involvement in financial irregularities, even though there were no criminal findings. Even though he was forced to step down, Singer did not retire to his home but was appointed chairman of the WJC after it was made clear that he would not deal with financial affairs. He also serves as head of another organization, WJRO, whose main goal is to identify money of Holocaust victims in dormant bank accounts
For years, Singer was one of the central personalities leading the campaign for restitution of Jewish property, including money found in dormant bank accounts in Switzerland. But, in January of this year, a grave report was released by the New York State Attorney General, Eliot Spitzer (who was elected this month as the next Governor of New York).
The report reveals apparent financial irregularities amounting to millions of dollars, administrative deficiencies and circular transfers of 1.2 million dollars form the accounts of the WJC in New York to a bank account in Geneva. From there, the money found its way to a private bank account in England in the name of Advocate Zvi Barak, in his capacity as a trustee, and from there, it arrived in an account in the name of a private company called Solar, in which Advocate Barak had a shareholding. Upon opening of the investigation, the money was returned. Barak, incidentally, is the business partner of Opher Hirschson, the son of the Finance Minister.
The investigation began after allegations were made by the Legal Adviser of the WJC in Geneva, Advocate Daniel Lack. Singer claimed that the money was given in 2001 by the Jewish Agency, which finances part of the budget of the WJC, for his pension and relied on a letter given to him by the former chairman of the Jewish Agency, Avraham Burg.
But, in the investigation, it became apparent that the man who replaced Burg as chairman of the Jewish Agency and serves today as Israel's ambassador to Washington, Sallai Meridor, contradicted his predecessor and said that the money was not intended for pensions.
Spitzer revealed the use of money by Singer for personal purposes. In his report, he describes, for example, how Singer managed to accumulate more than 450,000 points on his credit cards. Singer held several credit cards, including the exclusive black card of American Express, "Centurion", which is restricted to only the rich and famous. This magnificent card gives its holder unlimited credit and the cost of holding such a card is thousands of dollars a year. In total, according to Spitzer's assessment, Singer withdrew in cash approximately USD 671,000 to disburse on overseas trips (see WJC response below).
For example, in 2003, he submitted to the WJC, expense accounts amounting to USD 431,129 and in 2004, in the amount of USD 261,294. A breakdown of Singer's movements show that he flew to almost the entire world, sometimes together with his wife. For example, for two tickets to Germany, he paid (at the expense of the WJC, of course) USD 24,000. On the same day in September 2003, he paid an additional USD 1,000 for another flight. Six days later, his flight to Europe cost USD 12,000 and a week later, he paid EL AL USD 8,500. This was all paid by the WJC.
The total of all Singer's flights in 2003 was approximately USD 232,000 and the cost of his hotel accommodation amounted to approximately USD 173,000. In 2004, he really cut back and the cost of his flights and accommodation came to approximately USD 200,000.
Singer lives in New York, but this did not inhibit him from staying at deluxe hotels in the Big Apple, on which he spent in 2003 approximately USD 60,000 of WJC funds. In that year, he also stayed in deluxe hotels in Paris, Berlin, Rome, Vienna, Geneva, Rio de Janeiro, Budapest, London as well as in Jerusalem and Tel Aviv. In addition, he withdrew more than USD 134,000 in cash from the WJC account in New York and claimed before the Attorney General that he used the money for travel purposes.
Following the initial revelations, the Jewish Community in Geneva, demanded a comprehensive review of the handling of finances. The WJC management appointed an international accounting firm and a draft of their report was submitted to the Attorney General. Bottom line: A substantial amount of withdrawals and deposits in the WJC accounts in Geneva are not supported by any documentation.
But for Singer, business carries on as usual. He still heads the WJC, despite the finding that he violated his fiduciary obligations to the WJC. And he still serves as President of the Claims Conference.
Why?
The chairman of the Claims Conference, Advocate Julius Berman, says that "even though Singer is president of the organization, he has no access to finances. He raises the money but does not decide how to spend it."
Professor Alfred Donath, President of the Swiss Jewish Community, believes that following the Spitzer Report, "it is not appropriate for Singer to hold any public office".
Stephen Herbits, Secretary General of the WJC, who signed on behalf of the WJC, without admitting, the report of the New York Attorney General, said in a meeting with Yedioth Ahronot: "I would not have signed the report if I did not agree with every sentence in it. The report refers to failed management at the WJC." But, according to him, there was nothing criminal in the behavior of Israel Singer and he did not take any money.
Singer, in a telephone conversation, rejected the allegations and referred us to the WJC spokesman for comment: "I work on a voluntary basis for the survivors. The story with the report of Spitzer is over and everything is fine."
Assisted in investigation:
Niv Alexander
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