from the Forward:
An effort by Brooklyn’s Sephardic community to reform its charities is making modest headway eight months after three prominent community rabbis were arrested on suspicion of money laundering via their personal charity funds.
A model compliance plan developed by communal leaders and provided to the Forward goes some way toward addressing concerns raised by the scandal, in which donations to rabbis’ charities were allegedly returned surreptitiously in cash, less a 5% or 10% takeout.
Beyond a code of ethics, a conflict-of-interest policy, a document-retention policy and a policy to protect whistleblowers, the plan includes guidelines that seem aimed at diminishing the amount of business done in cash. Grants are required to be paid by check and to be awarded via a standardized process.
Still, the model plan leaves some unresolved issues. For instance, organizations are required only to “consider” not accepting cash payment for services. And it’s not clear how many of the policies will be legally enforceable. Individual charities are also allowed to adjust the compliance plan to their specific needs.
“Obviously this is voluntary,” said Eli Greenberg, a board member of the predominantly Syrian Sephardic Community Federation who is spearheading the project. Still, Greenberg, a New York attorney, expects the guidelines to have an impact on communal giving, including donations to the often opaque personal charity funds controlled by individual rabbis in the Syrian community. “Those rabbis who don’t [participate]… they may have trouble getting donors,” he said.