Alleging mismanagement, VP bids to oust longtime head of US Zionist group

Steven M. Goldberg, a Los Angeles attorney, is aggressively challenging Morton Klein for the national presidency of the Zionist Organization of America. Goldberg wants to take over the professional leadership of the scandal-plagued 117-year-old organization following what he describes as Klein’s “years of excessive financial gain and mismanagement.”

Goldberg’s campaign comes on the heels of the right-wing Zionist organization’s temporary loss of its tax-exempt status and its withholding of this development from its donors.

In September 2012, an investigation by the Forward revealed that the organization had failed to file legally required Internal Revenue Service forms for three consecutive years. Several months went by before donors and members learned of ZOA’s consequent loss of non-profit status.

The ZOA regained its tax-exempt status in May 2013. Between February 2012 and May 2013 donations intended for ZOA were directed to a donor advised fund held outside the organization.

ZOA was founded in 1897 and is the oldest pro-Israel organization in the United States. As an advocacy organization, it fights anti-Israel bias, educating the public, elected officials, media, and students about “the truth of the ongoing and relentless Arab war against Israel.” Among its early leaders were notable figures Supreme Court Justice Louis Brandeis and Rabbi Dr. Abba Hillel Silver.

ZOA president Morton Klein. (courtesy)

Public records revealed that during the years ZOA did not make the required IRS filings, Klein, who has been president for 20 years, according to the Forward’s 2013 Salary Survey, earned salaries far larger than executives in commensurate organizations. In addition, his pay jumped 38% during the years that the organization failed to make IRS filings, and therefore was given fewer donations.

Klein earned $315,385 in 2007, the last year for which filings are publicly available. However, according to the Forward, his base compensation in 2011 was reportedly $435,050. In 2008 alone, Klein’s total compensation was $1,245,851.

Klein was drawing these salaries at a time with the organization’s membership and donor bases were shrinking. During those three years, the organization’s total revenue decreased by $1.4 million.

“Mort Klein runs the ZOA like it’s his personal candy store,” accused Goldberg in an interview with The Times of Israel.

“I’ve been on the board since 2008 and the national vice chairman since 2010, and I have not once seen a budget for the organization. There is absolutely no oversight. Klein sets his compensation with ZOA chairman Michael Goldblatt and other friends he has on the board,” he said.

Goldberg, 60, reported there was a rift on the board when it was learned that ZOA lost its non-profit status. He was among those wanting to immediately make the information public. Goldberg alleges that Klein suppressed disclosure of the information and ordered employees to likewise withhold the information from donors and others.

When questioned by The Times of Israel, Klein refuted the allegations. He said ZOA’s tax paperwork was handled by the organization’s executive director, and that unbeknownst to Klein, the organization had applied for legal filing extensions. Due to a “glitch,” the filings were made two weeks late, and as a consequence, the IRS revoked the organization’s non-profit status. “It was a technical mistake,” Klein emphasized.

‘It was a technical mistake’

“We hired tax lawyers pro bono, and they advised us that legally, there was no requirement to put out a press release about the change in status. All we were required to do was to make sure that we did not write anywhere that we were a non-profit,” Klein said.

Contrary to Goldberg’s claim that the president kept the news from donors, Klein maintained that he told the board and major donors. “And I wasn’t even required to do so legally, but it was the right thing to do,” he said.

One ZOA employee, western region executive director Orit Arfa (who is a Times of Israel blogger), reportedly spoke up for more transparency and was dismissed in November 2012 after authoring at least one internal memorandum to her superiors opposing the decision not to proactively mention the loss of tax-exempt status. Arfa has sued Klein and the ZOA.

“You can’t be fired because you’ve insisted on behaving legally and ethically, because you resist an illegal order,” Goldberg told the Los Angeles Jewish Journal at the time.

According to Klein, Arfa was fired for having failed to do sufficient fundraising over the course of the year she was employed by ZOA, and only brought suit because Goldberg got her an attorney.

Goldberg originally joined the ZOA board because he liked Klein’s ideology and assumed the organization was professionally run.

“I would not have gotten involved in this organization had I known that it’s a sham, that it’s run by cronies and that it’s a rubber-stamp operation,” Goldberg said in retrospect.

“But now I am fighting to be ZOA president because I believe most of the approximately 1,000 members around the country are decent and mean well,” he explained. (Klein did not know the exact size of the organization’s membership, but estimated it to be around 10,000. The ZOA website puts the number at 30,000.)

“I want to fight to save this organization. It’s important. It needs to be run more transparently and the ratio between salaries and donations needs to be put back in balance.”

‘Because of all my hard work, ZOA paid off all its debt, and now we have millions in the bank’

Klein countered that his salary correctly reflects that amount of money he brings in for ZOA. He claimed he worked for free his first five years with the organization, and that in the years since, most of his salary has come from an increasingly large contribution from a single donor. (* See note at the bottom of this article.)

“Because of all my hard work, ZOA paid off all its debt, and now we have millions in the bank. We could survive for several years even without fundraising,” Klein asserted. “ZOA isn’t hurt by my generous salary.”

Goldberg is disappointed in Klein’s decision to move the ZOA’s upcoming national convention from New York to Philadelphia. Goldberg, who said he is the only person to have ever challenged Klein’s leadership, views the move as a means of rigging the presidential vote.

“He has moved it to his home town and has scheduled it for a Sunday and Monday [March 9 and 10]. Most members will not be able to take off work and travel to Philadelphia,” Goldberg claimed.

Klein accused Goldberg of lying and claimed that the convention is being held in Philadelphia at the urging of ZOA’s Philadelphia chapter. “In fact, most of my supporters live in the New York area, and besides, 46 of the board’s 48 members have already endorsed me.”

Klein and the board have refused to entertain the option of proxy or email voting, pointing to the organization’s constitution, which allows in-person voting only.

“I’ve even proposed doing an informal advisory vote by email in advance of the convention so that we can get nationwide input. If I lost this poll, I would bow out. But if I won, then the delegates should ratify the will of the majority,” Goldberg suggested.

Goldberg said the board refused to accept his proposal for the advisory vote in a phone meeting last week.

Goldberg has laid out his anti-Oslo Accords and anti-two-state-solution position on his campaign website, which also has a “Mort Klein Exposed” section pointing to Klein’s alleged lies about his salary, as well as links to negative press about Klein. Goldberg is using the mortklein.com domain name for the website.

“That’s a really sinister, sleazy move,” accused Klein. “All along, Goldberg has acted with monstrous disloyalty, and his interest is to hurt me because he wants to be president.”

“The ZOA is an old and important organization that deserves to be run with competence,” Goldberg said. “It should be almost as big as AIPAC and the ADL. Right now it’s even dwarfed by J Street, which is much newer.”

(* Correction: This article originally stated that the “single donor” paying much of Klein’s salary was “reportedly Sheldon Adelson.” Klein has assured The Times of Israel that this is not the case.)