Survivors Languish as Claims Conference issues remain Unresolved…writes Isi Leibler

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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.

Isi Leibler

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 unending.

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.

The 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 multibillion 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.

Moreover, those 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. Incredulously, 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 a $57+ million dollar 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 been mandatory.
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 mandatory.

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 sixty 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 limits. 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 by the Jewish people to disperse sacred restitution funds.

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 confirmed.

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 Report).  This review criticized the moral conduct of the Claims Conference for its efforts in preventing heirs from recovering stolen property from their families and demanded greater transparency. Following 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.

These superficial adjustments could not conceal the fact that the same small clique controls the organization and its resources whilst 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 $57+ million, a lack of transparency still prevails in relation to funds allocation. Huge sums of money are distributed to albeit worthy causes but totally unrelated to the Holocaust such as hospitals, nursing homes, Israeli infrastructure, Yeshivot and even Birthright. The response that Holocaust survivors benefit from this is a red herring and could equally apply to railroads or other forms of social welfare accessible to everyone. This led to calls for a genuinely independent commission to review allocation procedures – which were also rejected.

The German authorities have behaved impeccably, even when close to $60 million 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 recipients.

The overriding urgent challenge today, as highlighted this week during the deliberations of the Knesset’s Welfare, Labor and Health Committee, is to provide assistance to the elderly survivors unable to afford basic 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 dignity.

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 in difficult economic times and drastically reduce expenses. 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 has brazenly refused to accept any accountability concerning the $57 million stolen under his watch, receives a salary commensurate with that of the head of the International Monetary Fund.

The failure of representatives of Jewish organizations affiliated to the Claims Conference to raise their voices in protest concerning these issues is simply unconscionable.

Isi Leibler lives in Jerusalem. He is a former president of the Executive Council of Australian Jewry.