The Battle of Bronfman

A Soap Opera Storyline

The story of the fall of Bronfman—and the potential rise of Lauder—is the culmination of nearly three years of internecine struggles within the W.J.C.: of ancient friendships shattered, loyalties betrayed, finances mismanaged and enough high drama to fill an afternoon soap opera. The only difference, perhaps, is that the characters in this drama just happen to include Bronfmans, Lauders and a former fix-it man for Donald Rumsfeld, rather than Quartermaines and Cassadines.

The tale begins in 2004. At the time, the organization—which had been led by the elder Bronfman and his trusted ally, Rabbi Israel Singer, for some 25 years—was still coasting on its role in leading the restitution effort that had returned billions of dollars to Holocaust survivors. But in August of that year, Mr. Leibler, then the senior vice president of the W.J.C., raised allegations of serious financial mismanagement within the organization: He complained that the Bronfman-Singer duo had run the World Jewish Congress like their own “private fiefdom” and demanded an explanation for $1.2 million in funds that had been transferred to a Swiss bank account controlled by Mr. Singer. (The organization’s annual budget hovers around $10 million, according to newspaper accounts.)

Mr. Leibler’s claims led to a torrent of charges and countercharges, as well as an investigation by the office of New York State Attorney General Eliot Spitzer. (The investigation, which was completed in 2006, concluded that the organization “lacked appropriate financial controls” and “failed to keep adequate records regarding their fund-raising activities,” but found no criminal conduct. The organization agreed to adopt stricter governance and accounting policies, and Mr. Singer was given a new, non-fiduciary role.)

To help reassert control over the organization, Mr. Bronfman brought in Stephen Herbits, his deputy back in the days when he was still running the Seagram Company and, more recently, a special assistant to Donald Rumsfeld at the U.S. Department of Defense. For an initial salary of $420,000 a year (it was eventually lowered), he was charged with bringing his notorious pit-bull style to bear toward bringing the organization, and its finances, back in line.

But the enforced calm, if there ever was any, was fleeting. In recent months, the tensions bubbled over: The organization’s Israeli branch went to battle with Mr. Herbits over what they considered to be his autocratic management style; in March, Mr. Bronfman unilaterally fired Mr. Singer, sparking additional accusations of a Bronfman-Herbits autocracy; and throughout, frustration continued to build over Matthew’s aggressive presidential campaign.

When an explosive strategy memo, allegedly written by Mr. Herbits to Matthew, surfaced in The Jerusalem Post late last week, critics’ worst fears about the Bronfmans’ determination to maintain control of the organization wer
e confirmed.

“There is no doubt in my mind, drawing on all my various backgrounds, that you have what it takes to be a great leader of the Jewish people,” Mr. Herbits wrote in the Nov. 16, 2006, memo laying out how Matthew might go about vanquishing his opponents and winning the presidential prize. “As with your father, you will get better and better over time.”

This was not a universal opinion, however. For all the power of the Bronfman name, the young liquor heir was not an obvious future leader of the Jewish people. Nonetheless, armed with his Bronfman pedigree, Matthew began pressing to take control of the W.J.C.

“Matthew talked with me very openly about it,” Shai Hermesh, a member of both the Israeli Knesset and the W.J.C. steering committee, told The Observer several days before the committee’s meeting. “But I told Matthew that the World Jewish Congress is a democratic organization.”

The Bronfmans seem to have been well aware of the hurdles they might face in convincing the putatively meritocratic W.J.C. to accept a legacy candidate as their leader. In the Nov. 16 strategy memo, Mr. Herbits identified the dynasty factor as one of the chief reasons that Pierre Besnainou, leader of the European Jewish Congress, opposed Matthew’s presidential bid.

“He believes that the image of ‘dynasty’ is not appropriate for such an organization,” Mr. Herbits quoted the Tunisian-born leader as saying—and then proceeded to analyze how the Bronfmans should approach le problème Besnainou.