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Bitter Dispute over Claims Conference Fraud Report

Two of four members of the four-man committee that investigated the Conference on Jewish Material Claims Against Germany have quit over a report on the Conference’s $57 million fraud of Holocaust funds exposed four years ago.

The 80-page report declared that the Claims Conference, responsible for dishing out billions of dollars for Holocaust restitution claims, needs “a comprehensive restructure of…its culture structures, administration, management and governance.”

Abraham Biderman and Roman Kent quit the committee in protest over the report, which they said is full of inaccuracies and “does not take into account the substantial management improvements made subsequent to 2001.”

The committee was asked to review how the Claims Conference acted after receiving an anonymous letter in 2001 identifying several highly problematic restitution claims processed by the Claims Conference. Its senior officials, including current chairman Julius Berman, allegedly failed to detect that the fraud scheme was being carried out and continued until it was exposed eight years later.

In his letter of protest over the report, Biderman wrote Berman, “The affected parties were not given appropriate due process to react and respond to the factual statements contained therein. Please make sure that my name is not included among the committee members when the report is shared with the Board or released publicly.”

The two remaining committee member, Reuven Merhav, chairman of the executive committee of the Claims Conference, and Robert Goot, chairman of the governance committee, stood by the report, which was posted on Monday by the Forward.

The newspaper explained, “The report found a key weakness in the management structure of the Claims Conference: the alleged ringleader of the fraud, Semen Domnitser, had no superior….The committee reported that ‘the absence of professional control systems, as well as the absence of computerization…, constituted a key factor in enabling, and certainly in facilitating, the fraud.’”

Claims Conference officials have blamed the late Karl Brozik, the organization’s then-director in Germany, for not following up on the 2001 letter and conducting a thorough investigation.

Claims Conference executive vice president Greg Schneidor said, “The plain fact is that Brozik, while clearly not a manager in New York, was the second most senior staff member of the Claims Conference worldwide and certainly the most respected and knowledgable about” one of the funds that was defrauded.

He defended the staff in New York, which he said the report blamed at “great lengths,” and he pointed out that the 2001 letter was not made known to the Claims Conference board of directors.

So far, 31 people have pleaded guilty or already have been found guilty of fraud.

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