Berman: Claims Conference staff unaware of fraud

By
May 23, 2013 02:12

Claims Conference chairman denies to 'Post' of any knowledge of fraud within organization since 2001 probe.




Berman Julius

Berman Julius 370. (photo credit:Marc Israel Sellem/The Jerusalem Post)

Claims Conference chairman Julius Berman continued to deny having any knowledge of fraud being conducted within his organization prior to 2009 – only hours before JTA reported on Wednesday that he and other senior executives had launched a probe into the matter in 2001.

According to documents obtained by JTA, Berman’s law firm, Kaye Scholer LLP, launched a 2001 probe that failed to expose the ongoing theft on the orders of Berman and then-executive vice president Gideon Taylor.

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Speaking during an exclusive interview with The Jerusalem Post on Tuesday morning, Berman said that “neither the board nor the chairman of the board, nor anybody around the board, including the senior staff, was aware of it in 2009.”

He also praised the Claims Conference for how it handled the matter of the fraud once it was exposed, saying the US Attorney’s Office “went out of the way, which was unusual for the US Attorney, to thank us for our cooperation.”

Berman’s statement is consistent with the conference’s official narrative, in which Karl Brozik, then the organization’s director in Germany, led an investigation into allegations that New York-based conference employee Semyon Domnitser had approved five fraudulent restitution claims. Brozik subsequently closed the investigation.

In a statement to JTA last week, conference communications director Hillary Kessler-Godin blamed the closure of the investigation on the since-deceased Brozik.

She stated that he had “accepted Semyon’s explanations for the cases cited in the anonymous letter” that tipped Brozik off to the fraud, which ended up netting $57 million.

Neither Berman nor Kessler-Godin, nor any other conference employees, have referred to the Kaye Scholer LLP probe, conducted by paralegal Ryan Tan. Tan prepared a report that Berman sent to Taylor on September 5, 2001. The report, a copy of which JTA obtained, raised questions about Domnitser’s handling of the fraudulent cases, but did not suggest Domnitser was a party to fraud.

“A majority of the claims made by the person who wrote the anonymous letter were refuted by Mr. Domnitser,” the report said. “However, the accusations did raise further questions about the way the cases were handled by the Conference.”

On Monday evening, Berman notified the Post that he would decline to answer any questions about events prior to 2009 due to an internal board investigation that he had set up at the end of last week. When asked why Brozik had been tasked with investigating a Claims Conference employee located in New York, Berman replied that the Post was “not supposed to be talking about 2001.” He then added that “it would stand to reason that the first order of business would have been to look at the letter and look into it.”

When pressed, he said that he would not comment, as he had “a committee to look into that matter.”

Berman explained that after the Forward – which broke the story of the anonymous 2001 whistle-blower letter – had contacted members of the board asking for information, he had made the decision that “we shouldn’t go off half-cocked, as it were, and therefore I decided to appoint what I call a special leadership committee headed by our chairman of the executive, ambassador Reuven Merhav, to focus on the letter, to focus on the issues surrounding the letter and come back with a recommendation of the next step for the Claims Conference to do.”

On Friday, World Jewish Congress President Ronald Lauder, who sits on the board of the Claims Conference, sent a letter to Berman, asking, “Was the existence of the aforementioned letter of June 6, 2001, and the subsequent communications regarding that letter among members of the Claims Conference professional staff ever disclosed to the board of directors and/or the members of the executive committee of the Claims Conference, or other members of the Claims Conference key professional staff?” WJC General Counsel Menachem Rosensaft confirmed to the Post that Lauder had ordered the formation of a task force to conduct an independent probe of the Claims Conference, and that the commencement of the task force’s activity was contingent on the “response to the questions [Lauder] asked in [his Friday] letter” to Berman and current Executive Vice President Gregory Schneider.

Berman, asked whether he intended to cooperate with that probe if Lauder proved to be unsatisfied with his answers, said that if “you’re asking me if what we do is unsatisfactory to – I’m not sure who, to somebody who is calling the shots at the World Jewish Congress, assuming it’s Ron Lauder, and they launch an investigation, or they put together a task force to launch an investigation, and they ask us certain questions, I doubt very much that I would have a problem, but as I told you before, that has too many ifs, and knowing Ron Lauder and knowing the intimate relationship the World Jewish Congress has had with the Claims Conference through the years, I don’t consider we’ll have any problems working together in the future.”

When asked about statements Lauder made before taking the WJC reins in 2007 – that he wanted “transparency” at the Claims Conference and that he intended to reform the organization – Berman said that since Lauder had become president, there had not been “the slightest comment by him about anything we’ve done.”

Asked if he intended to contact an outside entity to conduct an independent and transparent probe of his organization, Berman replied that it had “been done.”

“The FBI and our people internally, [and] then eventually the German authorities through Deloitte, went through this from beginning to end,” he said.

The report, he continued, would “probably not” be released to the public, but he said the Post could “check with Deloitte.”

Regarding whether the report was being released to members of the board, he said that “we haven’t crossed that bridge yet, because what is critical in the report is that it reflects in large part what steps are being taken to assure it won’t happen in the future, and there’s been a hesitancy about going out to the public and giving them a dry run of everything that is set up now.”

Disclosing the report to the public, he said, would be “almost like setting up a security system and then telling the future people that might try to evade it, well, here’s exactly what we did.”

On Wednesday, Berman sent a statement to the Post in response to the report on the Kaye Scholer LLP investigation.

Referring to Merhav’s investigation, he stated that “in deference to the work of that committee, the Claims Conference will not publicly comment on any aspect of events that fall within the purview of the committee until after the committee has concluded its work.”

JTA contributed to this report. •

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