Periodically, Agudath Israel of America (aka Agudah) makes a show of concern about scandals and chilul hashem (desecration of G-d’s name) but then nothing changes. When it comes to financial scandals, denial sets in for big givers. After all, how can a baal tzedakah (big charity giver) be a gonif (crook). Nobody even acknowledges they were probably donating stolen money.
Their last big show in 2009 coincided with the conviction of the Spinka Rebbe (Naftali Tzi Weisz) for money laundering. In a spectacular display for the outside world there was a Haredi-sponsored event complete with an American flag on the podium.
However, it is common knowledge that many Haredi institutions exploit their tax status as religious organizations to launder money. As religious organizations they are exempt from having to report their income and expenditures on IRS 990 forms. So the government has no easy way of discerning irregularities. Some not-for-profits (NFPs) voluntarily provide that information to the IRS (and thus to the public). It is the gold standard for transparency and accountability. But nobody in the Haredi world exerts any pressure to do that because money laundering is woven into the texture of Haredi life. Before anyone starts howling, let me be clear, I absolutely know that there some Haredim who will not do it either as a matter of conscience or good judgment. However, hardly anyone will publicly pressure other organizations to become more transparent.
Consider for example an old case of the Rabbi (sic) Mahir Reiss and others who were convicted of laundering millions of dollars for Colombian drug dealers. In return, they got to keep 15-18% as money laundering fees. The vehicles they used included the Bobov Yeshiva Eitz Chaim.
The five years following the Spinka scandal should have given the Agudah plenty of time to make serious progress in combating lawlessness. Yet the latest convention made it sound like they were just now discovering the problem and beginning to address it.
Fifteen years ago there were also promises to confront the problem while in fact, the Novominsker Rebbe (Yaakov Perlow), the Agudah’s Rosh Moetzes (Head of the Council of Torah Sages).
That scandal involved a group of Haredim using Haredi NFPs to launder millions of dollar for Colombian drug dealers. One of the convicted defendants was Mahir Reiss. According to Jewish Week’s reporting of the sentencing:
Mahir Reiss’ attorney, Nathan Lewin, paraded witnesses onto the stand to testify about his client’s charitable and financial support of the Orthodox community in New York and Israel……
Perhaps the most stunning testimony came from Rabbi Perlow, also known as the Novominsker rebbe, who is a member of the influential seven-member Council of Torah Sages of Agudath Israel of America, the ultra-Orthodox advocacy group. Rabbi Perlow revealed that he was sitting shiva or in mourning — his wife had died several days ago — but he left his house because of the importance of pleading for leniency in Mahir Reiss’s case. Continue reading