Claims Conference chief comes out swinging

Berman issues harsh rejoinder to critics over fraud scandal; says it’s time to reveal facts of his relationship to organization.

June 2, 2013 04:41
Holocaust candles

Holocaust candles 370. (photo credit: REUTERS)

In a letter sent to his board of directors, Claims Conference chairman Julius Berman complained of the “unvarnished lies” published about him in the media, The Jerusalem Post has learned.

Berman also struck back at Jewish Agency chairman Natan Sharansky and World Jewish Congress President Ronald Lauder for their calls for an independent investigation of the leadership of the Claims Conference over their role in investigating a 2001 tip-off of a massive fraud scheme by conference employees.

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The Claims Conference was established in 1951 “to secure... a small measure of justice for Jewish victims of Nazi persecution” through “a combination of negotiations, disbursing funds to individuals and organizations, and seeking the return of Jewish property lost during the Holocaust,” according to the organization’s mission statement.

The fraud was eventually uncovered in 2009 after netting participants $57 million in Holocaust reparation funds.

In the 11-page document, which was obtained by the Post on Friday, Berman described his frustration with “the continuous repetition of the falsehoods and misleading statements about my actions [that] will be accepted as truths over time.”

Among those Berman singled out in the media for opprobrium were The Forward, The Jerusalem Post and pundit Isi Leibler, whose column runs in this newspaper.

The Claims Conference chairman has come under harsh criticism from critics such as Leibler, who recently wrote that he and other senior officials were guilty of “cover-ups and ethical failures at the highest possible levels” regarding the fraud.

According to documents obtained by JTA, Berman’s law firm, Kaye Scholer LLP, launched a 2001 probe that failed to expose the ongoing theft.

Prior to the publication of the JTA investigation, Berman’s spokeswoman had long blamed Karl Brozik for the failure of the Claims Conference to expose the fraud. Brozik, who died in 2004, was the organization’s director in Germany who had conducted an investigation prior to Berman’s, after receiving an anonymous letter detailing cases of fraud.

Berman wrote that he had received a call from “a senior member of our board” alleging that he had “ignored my responsibility to the Claims Conference Board, the men and women who have a fiduciary responsibility for the governance of the organization.”

In response to the unnamed board member’s comments and in response to “the tissue of lies and misleading statements that has been published by the papers,” Berman said that it was time to reveal the “unvarnished facts of my relationship to the Claims Conference from its very beginning through today.”

Members of the board represent major Jewish communal organizations from around the globe.

Berman’s letter comes as a response to an editorial in The Forward titled “a moral responsibility,” in which the paper’s editorial board said that despite a Federal probe in 2009, when the fraud was finally uncovered, the investigation had only “put an end to the fraud, but not to the underlying governance issues that allowed the fraud to continue for eight years after it was flagged.”

Regarding his role in the Claims Conference in 2001, when the initial reports of fraud surfaced, Berman wrote that starting in 1995, he had joined the organization as “its pro bono counsel.”

In his letter, Berman took issue with a Forward headline: “Claims Conference Chair Knew of Fraud Allegations 8 Years Earlier,” saying that “The simple undisputed and indisputable fact is that I was not the chairman of the Conference in 2001.”

In response, the Forward published a rejoinder, stating that Berman’s “assertions are just plain wrong.”

“In addition to serving as counsel in 2001,” the Forward countered, “Berman was a board member who served that year on two important and relevant committees: the Control [audit] Committee and the Executive Committee.

This information came from the Claims Conference’s 2001 annual report, but is omitted from Berman’s letter to the board.”

The Forward is clearly just articulating [or uncovering] problems that have existed for a long time at the heart of this enormously important enterprise,” the paper concluded.

Berman also expressed his “total puzzlement” as to why board member and Jewish Agency chairman Natan Sharansky had called on Berman to allow for the formation of an independent investigatory body to look into allegations against the Claims Conference.

“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 these?” Berman wrote to Sharansky.

The Post was not able to reach Sharansky – who spent the weekend in New York – for comment.

Berman says he cannot explain Leibler’s “obsession” with him. Berman met with Leibler once in “New York sometime in the mid 2000s after he was forced out of the World Jewish Congress and I was elected chairman of the Claims Conference,” he wrote.

“He said that he was out to get Israel Singer, our then-president, and he would be relentless in going after him, but he wanted me to know that his target was Singer and he had nothing against either me or the Claims Conference,” Berman recalled. “When I asked him the obvious question, so why did he want to meet me, he said that he intended to meet with other leaders of the Jewish Community also, to enlighten them about Singer. He then gave me a dossier about an inch thick, all of which, he said, related to Singer.”

Berman wrote that he did not read the documents.

According to Leibler, “Berman’s response is preposterous.”

Berman, he told the Post, “personally attacks all his critics but fails to refute the fundamental charge that he was aware of allegations of fraud in 2001 when he oversaw an investigation of those allegations. Yet he concealed this from the board when the fraud was discovered in late 2009.”

“I find it ironic that Berman would choose to attack me for disclosing the financial irregularities of the WJC which were proven to be correct. The fact that when I approached him to warn him about the allegations against Israel Singer, the then-Claims Conference president, and that he simply chose to ignore them – even after the results of the investigation of the New York att.-gen and Singer had been dismissed by the WJC – speaks volumes about his moral compass,” Leibler said.

Berman also critiqued to the Post a report that World Jewish Congress President Ronald Lauder has called for “a task force” to look into allegations against the Claims Conference, calling into question the reliability of a letter obtained by the Post stating Mr. Lauder’s intentions in this matter. The letter was provided to the Post by its recipient, who initially requested to remain anonymous.

WJC General Counsel Menachem Rosensaft told the Post on Friday that the WJC has “no comment regarding Mr. Berman’s letter to president Lauder” except to say that Lauder was still awaiting answers from Berman to questions he had sent him regarding the 2001 whistle-blower letter.

Referring to the communiqué obtained by the Post whose provenance Berman had questioned, Rosensaft stated that “the paragraph regarding the setting up of the WJC task force was in an email sent by president Lauder to Mr. Leibler.”

On May 17, Lauder asked Berman if the existence of the 2001 whistle-blower letter and “the subsequent communications regarding that letter” were ever “disclosed to the board of directors and/or the members of the executive committee of the Claims Conference.”

Lauder was not on the board of the Claims Conference in 2001.

"I suggest you call the WJC and inquire about whether it is investigating the CC and how that investigation is proceeding," Claims Conference spokeswoman Hillary Kessler-Godin emailed the Post after being asked for clarification of Berman's statements regarding Lauder's call for a probe.

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