The New Jersey Scandal, Pt. 2: The Israel Fallout

Even before the dust settles in the States, Israel and her charities will already start to feel the effects from last week’s scandal.

First, we can expect that donors’ skepticism of Israeli charities will increase, which is understandable. The current proliferation of nonprofits already casts doubt on their authenticity: Israeli charity-representatives hound communities weekly; American Friend organizations exist in abundance; internet and email advertisements appear on every Jewish website broadcasting Israel’s fight for its physical and spiritual survival. In short, this scandal has cast a shadow on a situation already wrought with suspicion, doubt, and misconception.

Second, we can expect the relationship that exists between Israeli amutot [nonprofits] and money changers to come under fire. Charities need their donation-checks to clear as soon as possible. As opposed to banks, “cash houses,” or money changers, can exchange cash for checks (for a one to two percent fee) with a wait time of zero to two days. Thus, Israeli charities regularly deposit large sums of cash received from money changers into their bank accounts. Continue reading

The New Jersey Scandal, Pt. 1: The Facts

Last week (July 23) in New Jersey, an undercover police operation revealed a rainbow of criminal dealings. The implications of the scandal vis-à-vis charities are too vast and far-reaching to be dealt with in one post.  Over the next day or two I will address the pertinent issues.  Questions and comments are welcome.

The Facts

Among the myriad accusations is the charge of the laundering of charitable donations totaling approximately 3 million dollars. The Jerusalem Post quotes sources saying that “at least some of the millions came from Israel” while the New York Times notes “much of the cash they provided him [the informant] came from Israel.” The Post explains that one of the rabbis detained “used a source in Israel to supply money through ‘cash houses’ [money changer].” The Post also quotes former Jerusalem Police Chief Mickey Levy who said Israeli authorities weren’t involved yet but didn’t rule out their involvement a later stage of the investigation. Continue reading