Opinion

Claims Conference Issues Unresolved

By Isi Leibler

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 this, the Conference on Material Claims against Germany (Claims Conference) has ignored appeals to consider temporarily freezing a number of projects and diverting funds to survivors in desperate need of support.

In addition, the scandal of embezzled funds by Claims Conference employees seems unending. A number of perpetrators were found guilty of theft and sentenced to prison. But survivor groups monitoring the ongoing trials were stunned when the Manhattan US Attorney General’s Office sought to suppress questioning as to an alleged lack of oversight and negligence by the Claims Conference management implying that had management merely 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 than $57 million. When the scandal first broke, the Claims Conference had initially suggested $350,000 was involved. In reality though, the trial showed that the theft was orchestrated over a 15-year period by Claims Conference employees, a senior manager and six key New York staff.

Despite calls for greater oversight of the multibillion dollar enterprise handling public funds, management continued to rely on only one part-time auditor to monitor a fund dispensing billions of dollars until the fraud was exposed. Meanwhile, the chairman and executive vice president under whose very noses the thefts took place, congratulated themselves inspiring a board resolution, expressing “complete confidence in the leadership and management of the Claims Conference and their commitment to the principle of transparency.” It is simply mind-boggling that Chairman Julius Berman and his Executive Vice President Greg Schneider could orchestrate such a resolution in response to calls for accountability for that which transpired on their watch.  Where resignations or dismissals would have been mandatory, even calls for a genuinely independent financial audit were also summarily ignored. In effect, management assured the Board that it had investigated itself!

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.  Board members meet annually and and are simply a rubber stamp for the chairman. Absent effective restraints, the organization is a personal fiefdom rather than a vehicle empowered by the Jewish people to distribute sacred restitution funds. All this is complicated by conflicts some Board members face because the organizations are recipients of the funds.

Besides the lack of accountability for the missing funds, a lack of transparency still prevails in relation to fund allocation. Huge sums of money are distributed to causes 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 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. That includes the astronomical salaries paid to senior Claims Conference administrators. For example, the CEO who presiding over the paltry sums paid out to struggling survivors, 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 Liebler is a former chairman of the Governing Board of the World Jewish Congress and a veteran international Jewish leader.

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