Financial Questions For Olmert’s Charity
07/16/08

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With some 53,000 residents in the state’s rural north-central flatlands, Monroe, La., is not the kind of town that would normally expect to play host to the mayor of Jerusalem. But in October 2002, Ehud Olmert came to the county seat of Ouachita Parish to urge 500 to 1,000 Evangelical Christians to give, and give generously, to support victims of terrorism in the Holy City he then governed. The vehicle Olmert offered for their donations was the New Jerusalem Foundation (NJF) — a charitable organization he had established as mayor two years earlier to fund civic projects in Jerusalem with philanthropic money and municipal cooperation. Now, three members of the charity’s board, including Olmert, have come under the investigative lamp of Israel’s National Fraud Unit for their complex financial relationships. And the charity’s own financial peculiarities may be part of a broader story. Long Island resident Morris Talansky, NJF’s U.S. treasurer, is already the focus of intense attention after testifying that he gave Olmert envelopes stuffed with $150,000 in cash. And this week the Israeli daily Ha’aretz reported that Joseph Elmaleh, another board member, gave Olmert a low-interest loan of $75,000 in 1993 – now worth $150,000 – that the current prime minister never repaid. At the time, Olmert sat on the board of a company Elmaleh led, and joined other board members in approving huge and controversial salaries and options for him. In Monroe, of course, Olmert’s audience knew none of this. They were just giddy with the exciting improbability of the visit.  “It was a big event,” recalled Mike Downhour, a local Christian radio broadcaster who helped organize the Monroe gathering. “They brought in one of the largest security details I’ve ever seen here.” And this was just part of the extensive speaking tour Olmert conducted that year. At mega-churches in Marietta, Ga., San Diego and Irving, Texas, Olmert called on audiences to donate to his new foundation to support victims of terrorism, during the height of the Second Intifada. Olmert’s partner on this road trip was Rev. Mike Evans, an apocalyptic, Jewish-born Pentecostal preacher with a history of proselytizing Jews and a gospel describing mass Jewish death at the imminent End of Days. Together, the two of them appear to have raised nearly $1 million. But today, the current general director of the New Jerusalem Foundation acknowledges that much of this money was never spent on the terror victims on whose behalf it was raised. “We’re in negotiations regarding what to do with [these funds],” said Pinchas Weil, who succeeded an Olmert aide to the post two years ago. Weil declined to say exactly how much remained unspent, but said it was “more than 2 million shekels [$602,000].” “We got millions of shekels for victims of terrorism,” he said. “But we didn’t spend all of the money. We didn’t need it. The terror wave stopped. We basically raised a lot more money than we needed for this.” That might be news to Israeli victims in need of long-term counseling for post-traumatic stress, amputees with ongoing medical needs or even recent victims of rocket attacks in Sderot, near the Gaza border. But a two-month investigation by The Jewish Week has found many financial anomalies in the operation of the New Jerusalem Foundation and its American fundraising arm. It was Talansky’s testimony last May that set off the original outcry in Israel that has imperiled Olmert’s tenure and intensified a police investigation into his financial dealings. Olmert says the funds Talansky gave him were for political campaigns, and not personal use. Talansky, testifying in Israel this week, failed to return a phone call seeking comment on this story. But while much attention has focused on what Olmert did with this money, relatively little attention has been paid to where Talansky may have gotten it. It could not be learned whether Israeli investigators were looking into the affairs of the charity as part of their Olmert corruption probe. But The Jewish Week found, among other things, that: • NJF’s annual reports with the Government of Israel’s Charities Registrar show millions of dollars less in contributions than what its officials told the press it had collected at the time.  • NJF’s U.S. arm reported transferring to Israel some $271,000 more than the Israeli operation reported receiving between 2003 and 2006.
 • The foundation’s U.S. arm, incorporated in 1999, did not hold board meetings in which its trustees could approve funding decisions, as required by U.S. law. • NJF officials acknowledged to the Charities Registrar that it had kept more than $1.15 million in 2004 contributions off its books, saying it had instead channeled this money directly into charitable projects of its choosing. • The foundation’s U.S. fundraising arm failed to disclose to the Internal Revenue Service its ties to the Jerusalem operation, as required by law, and the salary of its Jerusalem director general, Olmert aide and fundraiser Zvi Raviv. According to Israel Charities Registry files, Raviv received steady salary increases leading to $136,000 in compensation in 2006.
Nevertheless, Raviv states adamantly, “My salary has not changed by one cent since I became director of the NJF.” William Josephson, a former chief of the New York State Charities Bureau, informed of The Jewish Week’s findings, said, “Were this a New York State charity, its performance would certainly bear inquiry, perhaps even investigation.” Raviv stepped down from his NJF post in 2006, three years after Olmert left the mayor’s office to become a national cabinet member and then prime minister. Weil, his successor, was appointed by current Jerusalem Mayor Uri Lupolianski. But Weil cut all ties to the group’s U.S. branch after he came into office. And records in New Hampshire, where NJF is incorporated, show the U.S. group dissolved itself in March 2006.
 
Setting Up A Foundation Established by Olmert in 1999, while he was mayor of Jerusalem, the New Jerusalem Foundation supported municipal civic projects favored by Olmert and the foundation’s mostly foreign donors. Its small group of board members in the United States included Olmert as president, Talansky as treasurer, and Gary Wallin, a prominent officer of the American Israel Public Affairs Committee, as assistant treasurer. Olmert launched his own foundation after becoming frustrated with the refusal of his predecessor, Teddy Kollek, to turn over to him the reins of leadership of the Jerusalem Foundation. During his many years as mayor, Kollek helped raise tens of millions of private dollars per year from donors around the world for ambitious civic and social welfare projects he supported. Olmert, after defeating Kollek in the 1993 mayoral election, expected that leadership of the Jerusalem Foundation, too, would fall to him. But Kollek refused to step down. At some point in the late 1990s, Raviv, the longtime Olmert aide, began seeking funds for a new foundation, to be headed by the new mayor. A controversy arose when it became clear he had been doing so for more than a year before any legal entity existed to receive contributions. In December 1999, Raviv told The Jerusalem Post that he had raised funds for the organization for some 15 months before it was incorporated. He wrote a letter to the local Jerusalem weekly, Yerushalayim, in September 1999, saying the foundation had by then raised $2 million. But in April 2000, when accountability for the money became an issue, Raviv told The Post that the foundation did not actually receive any funds until December 1999, when it received tax-exempt status from the IRS. More recently, in an e-mail to The Jewish Week, Raviv contradicted this, stating that the foundation had received $1 million a year from an unnamed foundation “from 1998 until my departure” in 2006. For critics, the big questions were: how much money was raised without accountability, and where was Olmert putting it? In a written response to questions posed by Jerusalem City Council Member Anat Hoffman, Olmert stated in April 2000 that the foundation had already received $4.5 million, and that the money had been deposited in “city coffers.” But in its annual report to the Israeli Charities Registrar that year, the new foundation reported contributions of less than $1.6 million. In the years that followed, similar gaps appeared in the sums the charity told the media it had raised and in the contributions it reported to the government Charities Registrar. The Jerusalem Post reported that New Jerusalem Foundation had raised $5 million in 2002 and $4 million in 2003. But the foundation reported to the Charities Registry that it raised only $2.56 million in 2002 and $2 million in 2003. “I have no desire to respond to information contained in newspaper articles which, as far I remember, were usually written without consultation with the NJF and based on rumors in place of facts,” Raviv e-mailed The Jewish Week when asked about this. “The only fact which I can contribute is that when somebody reported on ‘pledges,’ the journalist must have confused it with cash payments.” The foundation, however, never sought a correction from The Jerusalem Post, and the reported sum for 2000 came from a written communiqué from Olmert himself. Daniel Ben-Tal, the Post staff writer who reported the foundation’s 2002 and 2003 data, recently told The Jewish Week: “Having re-read the article and dredged the story from the depths of my memory, I can almost definitely recall that the source of my figures came from my phone conversation with Zvi Raviv.” It is possible that the foundation was simply boasting, inflating its contributions for public consumption. But a 2006 statement NJF submitted to the Charities Registrar indicates that at least some of its contributions were, indeed, kept off the books. The registrar, which oversees nonprofit associations in Israel, noted that about one-third of NJF’s 2004 revenues were going to administrative expenses. “This contradicts the directives of the association registrar for proper management,” the agency’s auditor warned. Administrative expenses, this official wrote, “cannot exceed 25 percent of revenues.” The auditor reported NJF’s response: that it had raised an additional $1.15 million “that was transferred directly to project managers.” Taking these revenues into account would lower the percentage spent on administration, the foundation argued. NJF offered no account of these funds. And the registrar rejected this argument, noting dryly, “If the monies were not received by the association and were not registered in its accounting department, one cannot view this as income of the association.” Asked by The Jewish Week about this money, Raviv said that NJF had an agreement with another foundation to donate $1 million per year “to projects in Jerusalem presented by NJF,” plus a 3 percent “overhead” that allowed NJF to hire someone to “coordinate” these projects. “We preferred that the money go directly to those NGO’s,” he responded by e-mail, “thus getting most of the money to the actual projects. In this framework we did about 200 projects all listed in NJF files.”

Raising Cash, And Questions For all of this, though, back in the United States, Evangelical leaders still glow when remembering Olmert’s visit to their churches to raise money for the New Jerusalem Foundation on behalf of victims of terrorism. Pastor Leo Giovinetti of the Mission Valley Christian Fellowship in San Diego presented Olmert with two checks totaling $500,000 when he came to speak there in November 2002. “We learned ‘HaTikva’ for the night of the dinner,” Pastor Giovinetti recalled. “The vice governor of California came and local political representatives attended. We had a full room. It was elegant. And we had a two- or three-minute video presentation showing just how painful terrorism can be. I thought it was quite a night.” In Irving, Texas, Marietta, Ga., and Monroe, La., Olmert teamed up with Rev. Evans, the Jewish-born Pentecostal preacher who set up the local venues for the rallies and joined Olmert to speak from the podiums. Rev. Evans, a controversial figure with the Jewish community in his native Dallas, had been strongly criticized for setting up a “Holocaust museum” that purported to give visitors the experience of being “herded into a boxcar [and] shocked beyond your wildest imagination as you find yourself right in the middle of a German concentration camp.” The enterprise included appeals for financial support to proselytize Israeli Jews or, as Evans' fundraising literature puts it, “to share the message of God’s love with every Jewish home in the entire nation of Israel.” In Irving, a suburb of Dallas, The Jerusalem Post reported, Rev. Evans exulted that the evening raised some $400,000. The Dallas Jewish Week, citing Rev. Evans and Raviv, reported a take of at least $326,000. Anyone donating $350 or more received a copy of Rev. Evans’ book, “Jerusalem Betrayed,” the Dallas weekly noted. In it, Rev. Evans predicts an imminent End Time that will see a war in Israel so terrible that blood “will flow down the Jordan River Valley, down the length of the Dead Sea, and thence . . . the entire length of the Negev to Eilat.” In Monroe, Olmert raised about $20,000 at a $500-per-plate private gathering before going on to address a crowd estimated at 500 to 1,000. Rev. Evans asked the crowd to give donations up to $10,000 to Olmert’s foundation, according to the News-Star, Monroe’s local daily. In Marietta, just outside of Atlanta, Olmert raised about $60,000, according to a senior staff member of Mount Paran Church North, where the event was held. The staff member, who would speak only on condition of anonymity, said the offerings came in the form of both checks and cash. “It was without a doubt he was there to raise money,” recalled Downhour, the Monroe Christian broadcaster. He said Olmert “did just what he said he was going to do. He gave a good talk and made his pitch.” Today, Rev. Evans claims to have raised only $65,000 for the foundation in 2002, notwithstanding his statements to the press at the time. In a brief e-mail exchange via his secretary, Rev. Evans ignored a question asking if he received a share of the money raised for his work on the tour and, if so, how much. He adamantly denied that contributions were collected in cash. But the senior staff member of Mount Paran Church North wrote in an e-mail to The Jewish Week: “Mike Evans cannot support his claims as regarding checks only at this venue, nor his total [$65,000] estimate for the tour — unless he received nothing at the other locations, which is very, very doubtful!” Yet, despite an apparent total for the New Jerusalem Foundation that year approaching $1 million raised from these lectures—plus  whatever fundraising was done elsewhere—the charity’s  reports to Israel’s Charities Registrar show it spent just $540,585 on victims of terrorism between 2002 and 2005 — and nothing since. Raviv’s successor as NJF director general, Pinchas Weil, acknowledges “millions of shekels” not spent on victims of terrorism, as promised. But, he adds: “It’s not pleasant, maybe for all those donors. But they can say thank God we didn’t continue to have terrorism.”

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11/23/2009 - 12:21

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