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The Claims Conference Controversy

By Sam Sokol

There has been something of a hullabaloo lately regarding the Conference of Material Claims Against Germany. Between the early ’90s and 2009, $57 million was stolen by conference employees, and both the JTA and the Forward have reported that documentation that has come to light indicating that there were those among the top echelons of the organization who failed to uncover the full extent of the matter, despite a 2001 tip-off from an anonymous letter-writer.

The Claims Conference is the Jewish organization tasked with dealing with the German government over the issue of reparations for the crimes committed by the Nazi regime.

In 2001, Karl Brozik, the head of the conference’s operations in Germany, received a letter warning him of several restitution claims that had been approved by New York-based conference employee Semen Domnitser, who was recently convicted by a New York court as a leader of the scheme.

During Domnitser’s trial, the 2001 letter came to light and the Forward reported that several senior leaders of the conference had been made aware of its existence. The Claims Conference told the Forward that Brozik had investigated and that he had shut down his inquiry without finding anything. Brozik died in 2004.

Subsequently, the JTA reported that current chairman Julius Berman, who had been a member of the board and pro bono counsel in 2001, had also launched his own investigation, which he had previously not mentioned, assigning a paralegal from his law firm to look into the matter. The probe failed to halt the fraud, which continued for the better part of a decade.

According to the JTA, “It’s clear that the top leaders of the Claims Conference were involved in investigating an anonymous accusation of restitution fraud in 2001; the question is who bears the responsibility for failing to detect that a broad fraud scheme was under way.”

Critics, such as Jerusalem Post columnist Isi Leibler, called on Berman to resign over the affair, while Berman shot back that he believed that he bore “no fault at all” for the fraud. Berman was elevated to chairman in 2002.

Following the reports by the Forward and JTA, members of the board who represent major world Jewish organizations have called on Berman to provide answers. World Jewish Congress President Ronald Lauder sent Berman a list of questions and WJC general counsel Menachem Rosensaft confirmed to the Jerusalem Post that should Berman’s answers not satisfy Lauder, he will push forward with an independent probe of the Claims Conference.

Forward publisher Samuel Norich, who represents the Jewish Labor Committee on the board, as well as the American Gathering of Jewish Holocaust Survivors and Their Descendants, and Jewish Agency Chairman and board member Natan Sharansky have also all called for an independent look at what happened in 2001.

Recently, Berman sent an eleven-page letter to members of the board, critiquing the Jerusalem Post and the Forward over their reports, saying that he was upset by the “unvarnished lies” being spoken about him. Berman complained of “the tissue of lies and misleading statements that has been published by the papers.”

He reminded members of the board that he had set up an internal inquiry into the matter under the auspices of a board member and stated that since the FBI and Justice Department had looked into the issue of the fraud, that should satisfy the voices calling for a new review.

In his letter, Berman addressed Sharansky, asking if the Jewish Agency chairman was aware that “we had two of the most independent public entities in the world handling the investigation of the ‘embezzlement of funds’—the United States Department of Justice and the Federal Bureau of Investigation. Is it even possible to identify more public, independent, and effective bodies than these?”

During a recent interview with the Jerusalem Post, immediately prior to the publication of the JTA report detailing his own firm’s investigation into Domnitser, Berman said that “neither the board nor the chairman of the board, nor anybody around the board, including the senior staff, was aware of [the fraud] in 2009” when it was finally discovered.

The matter was being handled internally, he said, noting, “I decided to appoint what I call a special leadership committee headed by our chairman of the executive, Ambassador Reuven Merhav, to focus on the letter, to focus on the issues surrounding the letter and come back with a recommendation of the next step for the Claims Conference to do.”

An investigation into the Claims Conference regarding the fraud was commissioned by the German government, which funds the conference through reparations, and was carried out by services firm Deloitte, he told the Post. However, he also said that the report had not been provided to either the public or to the board.

Asked why it had not been provided to the board, Berman replied, “We haven’t crossed that bridge yet, because what is critical in the report is that it reflects in large part what steps are being taken to assure it won’t happen in the future, and there’s been a hesitancy about going out to the public and giving them a dry run of everything that is set up now.” v

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Posted by on June 13, 2013. Filed under In This Week's Edition. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.