Every day we hear additional heartbreaking stories depicting the appalling
suffering of destitute, elderly Holocaust survivors denied elementary needs such
as food, medicine and other basic services to enable them to live out their
remaining years with dignity.
Yet despite the public clamor, the
Conference on Material Claims against Germany (Claims Conference) has ignored
appeals to consider temporarily freezing a number of projects and diverting the
funds to survivors in desperate need of support.
In addition, the scandal
of the $57 million embezzled by Claims Conference employees seems
A number of the perpetrators were found guilty of theft and
sentenced to prison terms. But spokesmen for survivor groups monitoring the
ongoing trials were stunned when the prosecutor from the Manhattan US
Attorney-General’s Office sought to suppress questioning by the defense alluding
to an alleged lack of oversight and negligence by the Claims Conference
management. The implication was that had management fulfilled its obligations
and appropriately implemented checks and balances and other procedures, the scam
may have been averted.
There are now concerns that more funds may have
been stolen and that the greatest fraud in Jewish organizational history may
even exceed $57 million.
When the scandal first broke, the Claims
Conference had initially suggested that merely $350,000 was involved.
theft was orchestrated over a 15-year period by Claims Conference employees,
including a senior manager and six key staff from the New York head office.
Prior to that, in the wake of a series of earlier scandals and highly
questionable payments to consultants and organizations, there had been public
calls for greater oversight of the multi-billion-dollar enterprise handling
public funds. But these appeals were contemptuously dismissed and management
continued to rely on only one part-time auditor to monitor a fund dispensing
billions of dollars until the fraud was exposed.
responsible for supervising the enterprise, including the chairman and executive
vice president under whose very noses the thefts took place, instead of
instituting an independent review to determine the facts, had the chutzpah to
actually congratulate themselves. Incredibly, they “inspired” a board
resolution, unblushingly expressing “complete confidence in the leadership and
management of the Claims Conference and their commitment to the principals of
transparency (including the presentation of fair, accurate and comprehensive
information regarding its activities); the fair processing of claims under the
various programs it administers; the principles of integrity, fairness,
accountability, dialogue and service in operating its programs and overall
operations; and to abide by the highest ethical standards.”
It is simply
mind-boggling that chairman Julius Berman and his executive vice-president Greg
Schneider could succeed in shamelessly orchestrating such a Stalinist resolution
in response to calls for accountability in the wake of an over $57m. fraud which
occurred on their watch.
Such contemptuous rejection of all managerial
accountability in the wake of such a massive fraud would be inconceivable in any
public company or government body where resignations or dismissals would have
In the same vein, calls for a genuinely independent
forensic financial audit to review other divisions to ensure that they had been
operating professionally were also summarily ignored. Instead the management
assured the Board that it had investigated itself! It is scandalous that the
Board representatives – who purportedly represent the global Jewish community –
failed to reject these resolutions and that none of them demanded that under
such circumstances, an independent investigation and review were
This failure of Board members to exercise their fiduciary
responsibilities is at the heart of the problem within the Claims Conference.
The organizational composition of the Board remains largely unchanged since its
establishment over 60 years ago and is today completely out of sync with the
changes that have since occurred in Jewish life.
Board members meet
annually and, by and large, simply rubber-stamp complex decisions and
recommendations proposed by the inner cabal, most of whom, including the
chairman, have been controlling the organization for too long, without term
That the Board has never in its history rejected an allocations
proposal highlights the lack of any genuine or effective Board engagement. The
absence of effective restraints gives credence to allegations that the
management regards the organization as a personal fiefdom rather than a vehicle
entrusted to them by the Jewish people to disperse sacred restitution
To further complicate matters, some board members face direct
conflicts of interest because the organizations they represent receive handouts.
At its last annual meeting, under pressure, the Board did finally agree to
appoint an ombudsman – a request it had resisted for many years. Yet whether
this role is being implemented in a meaningful manner has yet to be
Initially, the management also “rejected” the recommendations
of an independent review of German heirless properties by a leading QC
commissioned by the Board of Deputies of British Jews (the Gruder
This review criticized the moral conduct of the Claims
Conference for its efforts in preventing heirs from recovering property stolen
from their families and demanded greater transparency.
intensified expressions of public outrage and governmental inquiries, the Claims
Conference belatedly released lists of the properties concerned – but by then
most had already been surreptitiously sold on the open market.
superficial adjustments do not conceal the fact that the same small clique
controls the organization and its resources, while Board members still fail to
appreciate the gravity of their fiduciary responsibilities and lack the courage
to confront their management.
Besides the lack of accountability for the
purloined $57m., a lack of transparency still prevails in relation to funds
allocation. Huge sums of money are distributed to causes that, although worthy
enough, are totally unrelated to the Holocaust, such as hospitals, nursing
homes, Israeli infrastructure, yeshivot and even Birthright.
that Holocaust survivors benefit from all this is a red herring and could
equally apply to railroads or other forms of social welfare accessible to
everyone. Calls for a genuinely independent commission to review allocation
procedures were also rejected.
The German authorities have behaved
impeccably, even when close to $60m. of their taxpayer funds were stolen under
the responsibility of the Claims Conference. But, understandably, they have no
desire to become engaged in internal squabbles within the Jewish community. In
fact, with the rapidly diminishing number of survivors receiving support, they
have used residual funds in their budgets to widen the eligibility of
The overriding urgent challenge today, as highlighted this
week during the delibrations of the Knesset’s Welfare, Labor and Health
committee, is to provide assistance to the elderly survivors unable to afford
food, medicine and other basic necessities. This represents the greatest scandal
in Jewish life since the postwar era and it is our obligation to ensure that
they are enabled to live out their remaining years with a modicum of
We must demand that the Claims Conference freeze all
discretionary financial allocations and direct them solely toward Holocaust
survivors. That should be accompanied with an effort to react like other
responsible organizations to difficult economic times and drastically reduce
Few are aware of the astronomical salaries paid to senior
Claims Conference administrators. For example, the CEO who presides over the
paltry sums paid out to the struggling survivors, and who has brazenly refused
to accept any accountability concerning the $57m. stolen under his watch,
receives a salary commensurate with that of the head of the International
The failure of representatives of Jewish organizations
affiliated to the Claims Conference to raise their voices in protest concerning
these issues is simply unconscionable.The writer’s website can be viewed
He may be contacted at