On July 8, the Conference on Jewish Material Claims against Germany (the Claims
Conference), the wealthiest Jewish organization in the world, will hold its
annual board meeting behind closed doors.
Board members will be obliged
to respond to scandals involving their organization that have been widely
circulated throughout the media, casting shame on the entire Jewish
The most serious issue under review will be the lack of
accountability in relation to over $57 million stolen by 17 employees, including
a high-ranking administrator, over a 16-year period under the very noses of
senior executives at the head office.
Until now, instead of accepting
responsibility for the breakdown in oversight, management has manipulated the
board into passing shameless resolutions praising itself, and circulating
self-serving letters from directors claiming that “the organization is well led,
well governed, well staffed and manages its restitution funds in a manner
consistent with best practice and probity.”
In contrast to mandatory
procedures within public institutions accused of lesser frauds, Claims
Conference management has frenziedly resisted efforts to set up an independent
review to ascertain, among other issues, whether negligence was a contributing
factor. It has also brushed aside calls for an independent review to discover
whether there are additional skeletons in the closet.
management has refused to consider appeals to freeze allocations of
discretionary funds in order to ensure that there is support to enable elderly,
ailing Holocaust survivors to live out their remaining years with
But with the latest revelations and scandals, board members will
be obliged to cease acting as rubber stamps or may face the intervention of
outside bodies which monitor the management of charitable funds, and find
themselves open to charges of having failed to exercise their fiduciary
Board members uncertain how to respond should heed the call
of the Claims Conference’s first vice president, Jewish Agency chairperson Natan
Sharansky, who has stated that “we cannot investigate ourselves or our
colleagues or our benefactors,” and who, in no uncertain terms, has demanded
that a genuinely “independent public committee composed of distinguished
individuals who are not connected to the board or its beneficiary organizations
examine all the events surrounding this unfortunate embezzlement... and examine
Claims Conference procedures and its structure” in order “to resolve the doubts
and concerns” regarding this body that prevail throughout the Jewish world so
“that the public trust can be restored.”
They should also pay attention
to Ronald Lauder, president of the World Jewish Congress, who was the first to
demand that the chairman of the Claims Conference, Julius Berman, directly
respond to specific questions relating to the latest allegations, and instructed
his organization to undertake a review of the Claims Conference.
will not be an easy task for board members. The damaging new disclosures
published in recent weeks in The Jerusalem Post
, The Forward and the JTA have
caused widespread shock.
In particular, allegations that senior
management leaders failed to adequately investigate details of fraud that had
been brought to their attention as far back as 2001 are highly
The accusation that both chairman Berman and CEO Greg
Schneider were warned about the scam, but failed to follow up, is what caused
some to question senior leadership.
More damning, however, is that it
appears that neither Berman nor Schneider disclosed their prior knowledge of the
fraud to the board, and, when confronted, engaged in deliberate attempts to
cover up their involvement and failure to follow up.
If confirmed, such a
cover-up would represent a major breach of governance, not to mention a public
embarrassment of the highest order, especially in view of management’s portrayal
of itself as a paragon of organizational morality.
A few months ago,
during the trial of the embezzlers, a court transcript quoted CEO Schneider
expressing “shock” over the $57 million-plus fraud. Yet, when confronted with
the existence of an anonymous letter from 2001 warning of the fraud, the Claims
Conference spokespersons released a series of conflicting statements, and
ultimately apportioned blame exclusively to a German manager who died in
What they failed to reveal was that Berman himself, then counsel to
the Claims Conference, had been commissioned to investigate the fraud
allegations in 2001.
In a widely disseminated, self-incriminating,
11-page memorandum attacking his critics rather than addressing the charges
against him, Berman ironically highlights his failure to responsibly administer
the duties of the chairman of an organization dispensing restitution
His arrogance and failure to pursue sound governance and
organizational transparency is highlighted by his boast that he refused to
examine incriminating evidence I provided him some years ago – evidence that was
subsequently verified by the New York attorney-general.
misleadingly implied that the FBI, by conducting a criminal investigation,
effectively validated Claims Conference oversight of funds.
matters worse, Berman justified his refusal to apologize for the theft on the
grounds that it was German taxpayers’ money, and did not have an impact on
Such an unconscionable remark in itself provides
sufficient grounds for deeming Berman unfit to hold a leadership role in the
Regrettably, Berman fails to appreciate the gravity of the
situation. Rather than allow an independent investigation, he has set up a
bureaucratic procedure that relies on the discredited technique of appointing an
internal committee comprised of handpicked loyalists to review the
To offset demands for an independent investigation, this internal
committee has requested that the Claims Conference ombudsman, an employee of the
Claims Conference whose contract will soon be reviewed for renewal, determine
what has transpired.
The ombudsman will report to the internal committee,
which, in turn, will make a recommendation to the board. This process hardly
qualifies as an independent review, and certainly will not address the primary
issue of accountability.
Furthermore, the Claims Conference board has not
been informed as to what the ombudsman was instructed to scrutinize, and whether
his brief will include Berman’s and Schneider’s alleged cover-up of their prior
exposure to the fraud.
There are already bitter complaints that the
Ombudsman’s findings and the committee’s recommendations are being suppressed
prior to the board meeting. But even worse, in what can only be described as an
unconscionable action, the board agenda just circulated, lists the report as the
very last item on the two day meeting even after the election of the incoming
leadership team. Aside from making a mockery of governance and due process,
relegating such a crucial issue relating to accountability and allegations of a
cover up to the end of the meeting,demonstrates that the leaders continue
operating the organization like their personal fiefdom and treat the directors
with utter contempt.
It is therefore no surprise that last week, noted
Holocaust historian Deborah Lipstadt pessimistically predicted that nothing
would change and that none of the leaders would even relinquish their positions,
saying “Have they lost all sense of decency, if not shame?”
One test as to
whether the Claims Conference is willing to undertake reform or face
intervention from an external monitoring body is whether Julius Berman will
continue to insist that he remain chairman of the board, despite the many
reasons he should step down: his arrogance in running the organization like a
private fiefdom; his failure to establish genuine governance and organizational
transparency; his unwillingness to intervene to ensure a greater flow of funds
to aging Holocaust survivors, and his alleged failures relating to the $57
million fraud. Berman has occupied the position of chairman for over 11 years;
it is time for him to go.
But it is not just Berman who must accept
responsibility and take action.
Greg Schneider and all those responsible
for failures of oversight must be held accountable, including those who
participated in the cover-up by withholding information from the board,
breaching a fundamental principle of organizational governance.
possesses a modicum of consideration for the well-being of the Claims
Conference, he will realize that in retaining the chairmanship in the current
climate, he will be acting solely to promote his ego, and will be displaying
utter contempt for the standing and reputation of this crucial organization. If
he does not appreciate this, board members purportedly representing world Jewry
have the obligation to ensure that he step down, graciously or
otherwise.The writer’s website can be viewed at
He may be contacted at [email protected]