Spitzer “Assurance” Acquits Criminal Rabbi Israel Singer Et Al

HIGHLIGHS OF NY AG ASSURANCE OF DISCONTINUANCE

p. 2: “These shortcomings [unreported compensation, unsubstantiated cash disbursements, illegal solicitations] did not compromise the core mission of the WJC or American sections;”

Section 7: : “A central source of weakness in WJC's financial administration was the absence of any oversight of financial matters by its governing bodies. ……prior to August 2004, WJC had no active body overseeing administration and financial management. Instead, WJC’s senior personnel handled finances informally…. The bookkeeping staff lacked professional training in accounting.”

Section 8: “Efforts … to institute a functioning governance structure … ‘to authorize all expenses – including travel – for the WJC offices … was disbanded’”

Section 9: “…At all times relevant to the OAG’s investigation, WJC’s primary source of revenue was support from donors in the United States. WJC had two accounts at Bank Leumi….”

Section 10: “Despite annual revenues in excess of $11 million, WJC’s and American Section’s books and records were not computerized. …Record maintenance was erratic.”

Section 11: “Loeb & Troper provided management letters to American Section annually…. Steinberg and Singer signed American Section’s Forms 990 without reviewing or discussing them….”

Footnote 1, p. 5: “WJC could not locate it's files…files…were lost, possibly during renovation…or were removed…by former employees.”

Section 12: “With the exception of the Geneva office, Konigsberg did not find any financial irregularities; … PriceWaterhouseCoopers concluded that a significant portion of the deposits and withdrawals [at UBS] could not be reconciled…attributable to the Geneva office’s practice of paying a significant portion of its payroll in cash. …Geneva office’s records [were] incomplete and disorganized.”

Section 14: “…from October 2002 to February 2003, Singer transferred $1.2 million from WJC’s account in New York to an account of WJC’s in Geneva to create a pension fund for his retirement, without seeking authorization… he tranferr[ed] the money to an account in London…the fund was returned (with interest) in August 2004… [Singer] violated his fiduciary duties as a trustee of charitable assets…”

Section 16: “…Singer had determined to use this money to fund a WJC pension plan for himself and Steinberg. …[Singer wrote funds would form] ‘the basis for the pension plan that we will institute.’”

Section 17: “…ex gratia payments…to employees who retired…were made…as a matter of grace or favor,….”

Section 18: “Singer instructed…Sidney Gruber…to transfer money [$1.2 million]…”

Section 20: “…WJC maintained no records in New York from which the existence of an asset designated as a pension fund in Geneva readily could have been detected. …Nothing in the ledger distinguished the five transfers from other transfers…”

Section 21: “Th[e] record keeping deficiency made funds vulnerable to loss and thus violated the obligation to properly administer charitable asses as required by EPTL [Estates, Powers and Trusts Law] § 8-1.4.”

Section 23: “Singer claims that he placed the [$1.2 million] in [attorney Zvi] Barak’s custody [HSBC Bank of London, under the name Solar International Fincance, Ltd.] because he did not trust the newly hired director in the Geneva office.”

Section 25: [Singer faxed a retainer to Barak]: “As we discussed I would to ask you to act as the custodian of the funds we have in our international fund of the WJC as there are several other problems we are encountering in Geneva that your expertise in this field may help us resolve See you there.”

Section 28: “Despite repeated requests from WJC and the OAG, Barak has declined to produce any written records of the HSBC account into which WJC’s funds were transferred.”

Section 29: “…nothing documented WJC’s ownership interest or ability to recover custody of the money if Barak died, disappeared or became incapacitated or if he or Solar became insolvent [again violating EPTL § 8-1.4].”

Section 33: “[Barak] reported to Bronfman that the money had been invested in an HSBC International Liquidity Fund….”

Section 35: “as WJC’s internal investigation confirmed, the evidence ultimately does not support a conclusion that Singer intended to use the money transferred to Barak’s custody for any purpose other than to create a pension fund. [But]when WJC agreed … to provide annual lifetime pensions to Singer and Steinberg of $150,000 and $92,000…Singer did not identify the money in Barak’s custody as a funding source for these pensions.”

Section 39: “The deficiencies in fiscal management, control and administration of the charitable assets of WJC and the American Section extended to the compensation of WJC officers. …car leases, life insurance, and private school tuition for the children of Beker and Steinberg were not reported….”

Section 40: “Singer received a total of $84,949 in loans from American Section. …[which] were not reported….”

Section 41: “Singer…received [$88,875]…that did not constitute compensation [other amounts received by Steinberg and Beker (42)]…including life insurance for his wife, major medical insurance for one of his children, and 15% of his care lease payments.”

Section 43: Singer…receive[d] ex gratia payments…2.32% of the [his] annual salary…multiplied by his years of service [which were] not approved or reviewed….”

Section 44: “Following his retirement…Singer received …$308,000…[for] accrued vacation and unused sick time… In the absence of any documentation…not reasonable compensation under N-PCL § 202(a)(12).”

Section 46: “WJC did not have a written travel policy….”

Section 47: “WJC’s officers and employees travel extensively, and at times, flew first class and stayed in five-star hotels. …Singer accrued…approximately 450,000 points attributable to such expenses on his American Express account,….”

Section 48: “Singer received $671,000 in [cash] disbursements…Beker received $166,330…”

Section 49: “…direct mail solicitations, which generated over half of the charitable contributions to WJC between 1999 and 2004, show that WJC, without registering with the Charities Bureau, was engaged in soliciting charitable donations in New York and elsewhere throughout the United States. Such solicitation in New York violated Article 7-A, § 172-d(2) of the Executive Law.”

Section 50: “certain of the direct mail solicitations…contained a pledge from Bronfman to match contributions of $36 to $25,000….”

Section 51: “…reports that the professional fundraiser sent to WJC and American Section did not state the amount donors had contributed in response to solicitations that contained a pledge to match. Absent a contribution-by-contribution analysis, there is no basis to conclude that WJC, American Section or anyone else was harmed by this inadequate recordkeeping.” [emphasis added]

Section 53: “Loeb & Troper…omitted compensation that American Section paid to WJC leaders…fees that American Section paid to Curtis Hoxter…outstanding loans by American Section to Singer…”

Section 61: “WJC’s solicitation materials and newspaper reports of its activities revealed that from time to time WJC engaged in lobbying with respect to legislative programs related to its mission.”

Section 63: “…American Section decided to make lump sum payments to each of the nine employees who were either retired or close to retirement…calculated to be nearly $1.5 million

p.25: “WHEREAS, WJC and American Section are willing to enter into this Assurance without admitting or denying the Attorney General’s findings…WHEREAS, the OAG is willing…to discontinue its investigation;” [emphasis added]

Section 67: “…activities that Singer and Steinberg may undertake…shall be limited to activities promoting WJC's mission and shall have no connection to the financial oversight…”

Section 69: “…Singer will repay American Section $132,000 within 90 days….and will use …at least 450,000 of the award points…to obtain discounts for travel or pay for other items….”

Section 75: “Neither WJC nor American Section shall retain Mr. Zvi Barak to perform any services on its behalf until such time as he provides a full accounting and documentation of the $1.2 million ‘pension fund’ while it was in his custody…”

Section 85: “This Assurance is contingent on and relies on the truthfulness and accuracy of representations made by WJC and American Section….” [emphasis added]

New York State Department of Law Charities Bureau, In the Matter of World Jewish Congress, Assurance Of Discontinuance, January 31, 2006.

World Jewish Congress Adopts Governance Reforms, Office of New York State Attorney General Eliot Sptizer, Press Release.