You’d hardly think that a relatively small Jewish philanthropic organization could be worth all the fuss.
But for two American-Jewish dynasties who covet control of the World Jewish Congress, the Bronfmans and the Lauders, Monday, May 7, will go down as the day that saw one family’s ambitions collapse in a heap, while another’s rose to heady new possibilities.
In the late hours of Monday morning, in a modern office in the sleek Seagram Building, Edgar Bronfman Sr., 77, announced that he was resigning as president of the W.J.C., a venerable organization whose tiny and relatively modest American presence belies its hefty international clout. For 71 years, it has defined itself as “the representative body” of the Jewish people, a federation fighting anti-Semitism and the last ravages of the Holocaust (it pioneered the restitution fight against the Swiss banks). And while its profile has been on the wane of late, its historic reputation—and the entrée it provides its leaders to presidents, popes and kings—has made it a coveted perch for a certain brand of billionaire.
That was certainly the case with Mr. Bronfman, who has been all but synonymous with the organization since taking charge in 1979. During his nearly three decades at the helm, he has hopscotched the globe in the name of world Jewry, earning himself the semi-serious nickname “the king of the Jews.” Until recently, he had dreamed of passing the title on to his son, Matthew.
But with his resignation—which came after months of such acrimonious infighting that at least one member had called for Mr. Bronfman to step down—his hopes for passing the crown to his son faltered, and the ambitions of another younger son, Ronald Lauder, were resurrected.
As of press time, Mr. Lauder had not formally declared his candidacy. But sources close to the cosmetics company heir say that he is actively considering a bid, reigniting a hope he harbored years ago of becoming the head of the fractious organization.
“He has a track record of leading important American Jewish organizations and doing so successfully and with distinction,” said Isi Leibler, a Bronfman critic who is encouraging Mr. Lauder to stand for the presidency.
Like other Lauder supporters, Mr. Leibler sees a potential Lauder presidency as a marked departure from the Bronfman model, a chance to lead the organization in ways that Matthew—had he been given the chance—never could.
Yet some observers wonder whether the two heirs are so different after all: Both are scions of some of the world’s most powerful Jewish families, both younger sons who have eschewed—or were perhaps passed over for—leadership positions in the family business. Instead, they have chosen to carve out positions in the world of philanthropy and Jewry, taking on a range of causes that have earned them praise from some quarters and charges of dilettantism from others.
At 63, Mr. Lauder is the better known of the two, a voracious art collector and serial board chairman who has used his ample resources to shape Jewish affairs, particularly in Israel and Eastern Europe. Tall and expensively dressed (he always wears suits, even in Israel, according to a New Yorker profile), he has managed to parlay his philanthropy into power, erasing some of the disappointments of his earlier life (most notably a costly bid for the Mayoralty in 1989).
Indeed, his unrequited desire to lead the W.J.C. notwithstanding, he has previously headed some of the world’s heavyweight Jewish organizations—from the Jewish National Fund to the influential Conference of Presidents of Major American Jewish Organizations.
Among the most common comments made to The Observer by his acquaintances was the following: He is smarter than people think.
The younger Mr. Bronfman, an investor by trade, is still struggling for that recognition. At 47 years of age, his Jewish leadership credentials are limited to a stint as W.J.C. finance chairman and several years as chairman of the 92nd Street Y. In addition to the attention that comes with being born into an immensely wealthy family, he has received publicity for undergoing two rather public divorces, and he made headlines when he resigned from the board of the Israel Discount Bank. (He stepped down in April after a member of the bank’s board launched an investigation into whether he had used his position at the bank to advance his own interests. The report has not been made public, but according to an account in Crain’s, it did not come to any conclusions about Matthew’s activities.)
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
“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.
“He is French. Don’t discount this. He cannot be trusted,” Mr. Herbits advised. And then: “He is Tunisian. Do not discount this either. He works like an Arab.”
In one section of the document, Mr. Herbits quite bluntly suggests “an infusion of cash—say $5 million” from Matthew’s father, uncle Charles Bronfman, and siblings and friends to serve as a “transition vote of confidence” in the heir. “You would, of course, have to make a substantial gift yourself,” he reminds the candidate.
Another section of the document is titled, quite simply, “Engage, fight and win”—a clear reminder of the author’s Pentagon roots.
(Mr. Herbits didn’t respond to calls for comment. Mr. Besnainou told The Observer that he received an apology from Mr. Herbits at Monday’s meeting.)
The now-infamous memo, combined with his father’s resignation, have all but assured that Matthew won’t be running for W.J.C. president anytime soon. But in his absence, one candidate, a South African steel magnate named Mendel Kaplan, has already surfaced; Mr. Lauder could be a second. An election will be held in New York on June 10.
Mr. Lauder first took on a prominent role in the W.J.C. in the mid-1990’s, when the organization decided to expand its restitution campaign to include art stolen from Jews during World War II. Mr. Lauder—an aggressive art collector who made his first purchases with his bar-mitzvah money—chaired the newly created Commission for Art Recovery, overseeing the auction of plundered artwork that had gone unclaimed.
It seemed like the perfect assignment for Mr. Lauder, but there were complications. At that time, he also chaired the board of the Museum of Modern Art, an appointment that put him in an awkward position in leading the crusade to return looted artwork. In one high-profile instance, Mr. Lauder presided over an exhibition of work by an Austrian collector whose acquisition tactics were being challenged. Mr. Lauder sided with the museum—against the families.
According to several sources, Mr. Lauder first expressed interest in the W.J.C.’s top post more than five years ago, around the time Mr. Bronfman indicated for the first time that he might resign.
At the time, Mr. Lauder was serving as the W.J.C.’s treasurer. But then his interest seemed to wane—a change of heart that has inspired various theories. One theory is that he was frustrated by limited access to the organization’s financial records; the other view is that his bid was quashed by Mr. Bronfman in private, and then painfully in public.
In an article in The New York Times in January 2002, Edgar dismissed Mr. Lauder’s prospects. “He’s not a serious contender at this point in time—at least I don’t think he is,” Mr. Bronfman said. “But I can’t tell him what to do and what not to do.”
Among other things, Mr. Lauder, who is a close supporter of Likud hawk Benjamin Netanyahu and patron of the conservative Shalem Center think tank in Jerusalem, and Mr. Bronfman, who is an ally of the dovish former Labor Party leader Shimon Peres, hold politically divergent views on Israeli matters.
A special assistant to Mr. Lauder, Warren Kozak, said that Mr. Lauder hadn’t made a decision yet about running. But given the reports that some on the board are already throwing their weight behind Mr. Kaplan, who is currently the chairman of the W.J.C., Mr. Lauder’s spokesman seemed to want to keep his boss’ foot in the door. “There should be fair, open elections, after all that has gone on,” Mr. Kozak said.
Still, it was perhaps the candidate himself who spoke most revealingly about his intentions.
This January, as news circulated that Mr. Bronfman was preparing to resign for real, Mr. Lauder’s friends pushed him to run, and his interest in the position swelled. He told Page Six: “This is not a monarchy. This is not something you can just hand over to your son, and say, ‘Here it is.’”