The chairman of the main Jewish organization within the UK’s Labour Party has been accused of playing fast and loose with donations and organizational expenses while he headed the Jewish Leadership Council, a British Jewish community umbrella organization.
An internal JLC audit relating to expenditure made several years ago, but only revealed now by the Jewish Chronicle, suggested that Jeremy Newmark, 45, overcharged donors for projects and member institutions for operating costs, misled auditors, billed the JLC for “inappropriate” expenses that included family vacations, made unaccounted-for cash withdrawals on the JLC’s account and rented an expensive car when it had been suggested that he choose a cheaper model — all while serving as the JLC’s chief executive.
The JLC’s trustees kept the alleged behavior under wraps to avoid a scandal, the Jewish Chronicle said, and accepted Newmark’s resignation on the grounds of ill health.
Newmark has insisted that he left his position after being diagnosed with diabetes.
Newmark, once a spokesman for the former chief rabbi, Jonathan Sacks, currently chairs the Jewish Labour Movement, a politically moderate Jewish group.
The financial allegations are likely to complicate his already controversial status within the party, whose leader, Jeremy Corbyn, is hoping to replace incumbent Prime Minister Theresa May in the next general elections.
Newmark has been a constant thorn in Corbyn’s side on issues of alleged anti-Semitism within Labour and the party leadership’s failure to deal with it.
In a lengthy response to the Jewish Chronicle, Newmark denied suggestions that he defrauded the JLC out of tens of thousands of pounds and misled charities about project costs.
“In the context of the overall budget of the organisation and the small core staff complement during that period, that level of expenditure by the CEO would be unsurprising — and I believe records will show that it was at all times within budget levels agreed by trustees,” he said.
The auditors found that during Newmark’s tenure as CEO, the JLC commissioned a fundraising and events consultancy owned and run by his wife for two projects at a total cost of £36,720 ($51,250). Newmark was one of two JLC employees who signed off on the payments and, according to the auditors, there was concern that the payments “were not being subjected to proper scrutiny.”
Elsewhere, the auditors wrote, “It appears to be standard practice in the JLC to falsify information relating to finances,” adding that member organizations were constantly being overcharged on Jeremy Newmark’s instructions.
One was the Partnerships for Jewish Schools, a division of the JLC aimed at dealing with the growth of Jewish schools in the UK. This was being “unjustifiably forced to absorb significant operational costs, without any consultation or sight of the real figures.”
On JLC projects, the report cited “lack of adequate project budgeting” that led to projects running on deficit and funds being drawn from other accounts not intended for the purpose.
It accused Newmark of having “regularly inflated project budgets” in order to get bigger contributions from donors and of having spent the surpluses on items not related to the gifts.
During a 2012 audit, auditors highlighted “anomalies in the listing of restricted/unrestricted funds [funds earmarked for specific projects, or not] across various JLC projects,” adding that while Newmark disputed this, the auditors had the evidence that “funds had not been used in the manner in which they were intended.”
The report charged that Newmark also failed to provide “honest responses” to auditors’ queries during the preparation of one audit, and that he apparently “made a concerted effort to prevent communication between staff members and third parties so as to provide cover for particular processes and practices.”
Among examples which the auditors called “inappropriate expenses borne by the charity [the JLC],” was a bill for £3,628.52 ($5,082) which Newmark submitted for a weeklong stay at Tel Aviv’s Hilton Hotel, including the cost of a children’s room, poolside food, laundry and Friday night dinner for his family. He also used JLC Hilton Hotel points valued at £2,350 ($3,280) for a five night stay for himself and his family at the Hilton Eilat Queen of Sheba and booked flights for family holidays in summer 2012 and 2013 through the JLC, on the grounds that he would attend work meetings during his stays.
Cash withdrawals were made but unaccounted for, both in the UK and overseas, the auditors charged. After an AJC conference in Washington in 2012, Newmark submitted 10 blank taxi receipts, having been given $400 as an advance, and gave instructions for each receipt to be filled in with $40, the report said.
In a category called “unlimited expenditure on JLC credit and debit cards,” the auditors wrote, “No adherence to JLC Expenses Policy” and “Seemingly unlimited spend on JLC debit and credit cards and lack of receipts given, and not subject to any approval process.”
According to the report, Newmark spent JLC money on personal taxi rides and on parking fines which had ballooned because he had failed to pay them. He used his JLC Blackberry as his personal phone and charged the JLC for a contract on a new iPhone.
He adopted a JLC pool car as his personal car — a Mini Cooper, to which he attached a personalized number plate — and, contrary to a request that at the end of the lease for that car he should take something cheaper, ordered a new BMW worth £46,000 ($64,200).
Denying the allegations, Newmark told the Jewish Chronicle that regarding hotel and flight expenses, “More often than not, personal holidays in Israel were regularly interrupted by JLC work or by myself taking time out of my holiday to hold JLC related meetings in order to save the need for standalone trips.All work travel and associated costs were signed off using a specific form by designated trustees, in advance, including travel and ground costs.”
Regarding the BMW, he said, “the Mini was returned at the end of its lease and it was, due to an offer, possible to lease a larger and more economically friendly car within the allocated budget.” The figure of £46,000 was “a sensationalist red herring” reflecting the taxable value of the car, not the monthly leasing cost to the JLC.
On the contracts for his wife’s company, he said, “I had no involvement whatsoever in this procurement process….I immediately recused myself from the matter — made this clear in writing and instituted a process whereby I had no role in supervising the work, approving invoices, payments or consultancy rates.”
He also denied misleading charities, citing “a lack of understanding,” and said he would never knowingly have sent any false information to the auditors.
“These allegations appear designed to be part of a politically motivated smear,” Newmark said. “JLC is a complex and multifaceted organisation that I led professionally from a startup to a key part of the communal infrastructure to broad acclaim….It is easy to take things out of context and try to create a picture that is removed from reality.”
JLC members include the leaders of synagogues of all denominations, the main communal charities, welfare organizations and representative bodies.