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.
Wearing a torn black coat, symbolizing his grief, Rabbi Perlow noted this was his first appearance in a courtroom in his life. Rabbi Perlow said he was “stunned and absolutely flabbergasted” when he learned of the charges against Reiss last year. Nevertheless, Rabbi Perlow argued that Weinstein should not use Reiss to send a message to the Orthodox community that criminal acts will not be tolerated. He said Reiss could do more good works out of prison. He also assured the judge that the Council of Torah Sages are taking steps to educate their community about lawlessness. “In light of instances in the media, the rabbis have discussed this,” he said, referring to a spate of embarrassing criminal cases over the last two years involving Jews from the chasidic or yeshiva world.
“This is a concept of chillul hashem [desecration of God] we are very much concerned about,” he said.”
Pardon my skepticism about promises by Agudah to promote more honest and ethical conduct. Fifteen years ago, the Novominsker Rebbe (Yaakov Perlow) “assured the judge that the Council of Torah Sages are taking steps to educate their community about lawlessness.” Now they are recycling the same rhetoric. I will believe them when I see new facts on the ground.