'Independent probe needed for Claims Conference'

Spokesman to 'Post': Jewish Agency chair called for probe into allegations against senior Claims Conference executives.

By SAM SOKOL, JTA
Natan Sharansky 311 (photo credit: Reuters)
Natan Sharansky 311
(photo credit: Reuters)
Jewish Agency Chairman Natan Sharansky has called for an independent probe to investigate allegations against senior executives of the Claims Conference, a spokesman informed The Jerusalem Post on Tuesday.
As Agency chairman, Sharansky has a seat on the board of the Conference, which was established in 1951 to secure restitution for Holocaust survivors and their heirs from the German government.
Sharansky made his call in a letter to Conference chairman Julius Berman in which he “recommended that a public independent committee of distinguished members who are not connected to either the Board of the Directors or the beneficiaries be established, in order to investigate the allegations so that the public trust in this important organization not be damaged,” the spokesman said.
The current controversy centers on the recent conviction of conference employee and Semen Domnitser, his leading role in defrauding the organization of $57 million between 1993 and 2009, and allegations that senior officials had been warned of his activities as early as 2001.
Over thirty people have been implicated in the plot, which came to light in 2009.
Sharansky joins World Jewish Congress President Ronald Lauder in seeking clarification. Lauder wrote to Berman and Schneider on Friday.
Lauder, who has called the allegations facing conference leaders a “long-term issue with potentially serious implications,” instructed WJC CEO Robert Singer to form an independent task force to “deal with and follow through on this and related issues.”
While Berman informed the Post that it would be “inappropriate and impolite to discuss our response publicly before we have responded personally to Mr. Sharansky,” he wanted to point out that the FBI and US Department of Justice conducted a rigorous and in-depth investigation into the fraud, with the full cooperation of the Claims Conference, and the results are available for all to study.”
“I doubt if anyone could identify more public and independent entities than these,” Berman asserted.
In 2001, an unsigned letter made its way to the desk of the Claims Conference’s director in Germany, Karl Brozik, which accused Domnitser of approving five claims that the anonymous author believed ineligible for restitution.
Brozik, who has since passed away, accepted Domnitser’s explanations of his behavior and closed the investigation.
The Jewish Daily Forward reported that this letter was seen by officials such as current executive vice president Gregory Schneider as well, which matches information contained in a document obtained that the JTA that shows top conference officials were sufficiently concerned by the allegations that they launched their own probe in 2001 that failed to detect the scheme. Those involved in the second investigation included the organization’s chief professional at the time, Gideon Taylor, and its counsel, Julius Berman.
The revelation of the report leaves unanswered the question of whether Claims Conference leaders showed gross negligence in failing to detect the fraud, as some critics contend, or whether Domnitser, who was questioned in the two 2001 probes, was such a shrewd operator that Claims Conference officials couldn’t help but be fooled.
The investigation was assigned to a paralegal at Berman’s law office, Kaye Scholer LLP, who went to the Claims Conference office in New York on Aug. 27, 2001 to review the five fraudulent claims and question Domnitser.
The paralegal, Ryan Tan, produced a report that Berman sent to Taylor on Sept. 5, 2001. The report, a copy of which was obtained by JTA, raised questions about Domnitser’s handling of the fraudulent cases but did not suggest Domnitser was 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.”
The report contains no smoking gun fingering Domnitser as perpetrating the fraud, and it’s not clear how common allegations of fraud were at the Claims Conference. However, the report demonstrates that the organization’s top leaders considered the matter sufficiently alarming that they had an outsider conduct an independent probe even after an internal inquiry had been conducted two months earlier.
In all, at least six senior Claims Conference figures were made aware in 2001 of the allegations involving fraud, though some were not privy to all the details: Domnitser, who perpetrated it; Brozik, who is dead; Taylor, who left the conference in mid-2009 and now works in real estate; former Claims Conference chief Saul Kagan, who is in his 90s and retired; Berman; and Greg Schneider, then assistant executive vice president and director of allocations and now the Claims Conference’s chief executive.
In response to the JTA story about the "botched probe," Berman sent a statement to the Post indicating that last week he had appointed a committee "to review all of the materials and recommend a course of action."
"In deference to the work of that committee," the statement read, "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.”