A scandal emerged in Israel this week that could force the resignation of Prime Minister Ehud Olmert. Olmert is under investigation for accepting hundreds of thousands of dollars from Long Island fundraiser and businessman, Morris (Moshe) Talansky between 1999 and 2006. Olmert swears the money was used to finance his campaigns.
The investigation is zeroing in on Olmert's charity, the New Jerusalem Foundation, based in Jerusalem. The foundation was registered in the United States in 1999 as a 501(c)(3)and uses Talansky's home address. Since its inception, Talansky has been the foundation's treasurer.
Two years ago, I posted about Olmert and the New Jerusalem Foundation at the TPM Cafe (the post is no longer online). I speculated about why the foundation in the U.S. was reporting relatively small contribution revenue even though Olmert was raising big money here.
The 2002, 2003, 2005 and 2006 990s are online at the Foundation Center's 990 Finder. The 1999, 2000 and 2001 990s are available to Guidestar's premium subscribers (I'm not one). The 2004 990 is missing altogether.
From the New Jerusalem Foundation's 2002 990:
Ehud Olmert - President
Zvi Raviv - Vice President
Morris Talansky - Treasurer
Gary Wallin - Secretary
Elmeleh Joseph - Director (800 Fifth Ave NYC)
Joel Zonzein - Director
Ranaan Dinur - Director
Elmeleh Joseph is probably Joseph Elmaleh, a financier specializing in oil and gas in the Middle East. Elmaleh was the long time chairman of Isramco, a publicly traded company that explored for gas and oil in Israel.
According to AIPAC's 2002 990, Gary Wallin was an AIPAC vice-president and head of the Wallin Group, Inc. in Manchester NH.
Wallin is also an officer of the Gush Etzion Foundation. Kfar Etzion, in the Gush Etzion region, was the first West Bank settlement established after the 1967 war. The Wallin Group takes a big chunk of the foundation's revenue for consulting and fundraising fees.
I'm not a big fan of Lyndon LaRouche's but his Executive Intelligence Review did a pretty decent job documenting information about the New Jerusalem Foundation and other similar organizations in December 2002. EIR described Wallin as a close friend of Joe Lieberman's and AIPAC treasurer. I have not confirmed that Wallin was ever AIPAC's treasurer.
According to EIR, Zvi (Tzvi) Raviv said that Wallin was a pass-through for cash which went directly to Olmert bank accounts in Israel, managed by Raviv and Uri Messer. Presumably, Raviv meant the cash went to the New Jerusalem Foundation's bank accounts in Israel. Raviv is the foundation's executive director. Messer is Olmert's legal advisor and it is rumored that he will testify against Olmert in exchange for immunity.
The New Jerusalem Foundation was registered in New Hampshire in June 1999 so Wallin probably was the custodian of the foundation's bank account, at least initially. (The foundation's NH registration lapsed in 2006.) In July 2001, the Jerusalem Post reported that donations for the victims of a dance floor that collapsed in Jerusalem could be sent to the New Jerusalem Foundation in care of Gary Wallin in NH or directly to the foundation's Jerusalem address.
According to the foundation's now-defunct website, donations to the foundation in the U.S. in 2005 could be sent to Helene Talansky, Morris's wife. If a donor wanted to transfer cash directly to the foundation in Israel, the Israeli phone and fax numbers were provided. The foundation used globalsecuresites.com for credit card contributions.
Not much money passed through the New Jerusalem Foundation in the United States, according to the 990s.
Donations by year:
1999 - $135,100
2000 - $376,750
2001 - $183,169
2002 - $160,497
2003 - $254,295
2004 - $267,911
2005 - $ 76,654
2006 - $208,826
According to the Jerusalem Report, the foundation reportedly raised $15 million in its first of operations. But according to EIR, Olmert told the Jerusalem Post in 2000 that he had received $4.5 million and had invested the money in 80 separate Jerusalem projects—but no further details were provided, other than a blanket statement that the foundation is "in the process of registration.
If any of those millions did pass through the New Jerusalem Foundation's US bank accounts, the foundation never reported it.
I read a number of news stories about Olmert raising money for the foundation in the U.S. over the years and none of that money was reported in the foundation's 990s.
Jerusalem Post, 9/10/02:
"Jerusalem Mayor Ehud Olmert has accepted an invitation to co-host a massive prayer meeting of support for Israel at the Virginia church of American evangelical leader Rev. Jerry Falwell next month.
The event, known as a "Jerusalem Prayer Summit," is part of a campaign kicked off by Olmert in a visit to Dallas in June. Participants in the Dallas gathering gave more than $ 400,000 in cash and pledges to the New Jerusalem Foundation for terrorism victims in Jerusalem.
Leading up to the Virginia event, Olmert is to host a World Jerusalem Prayer Summit in Jerusalem this month for some 300 of America's most influential Christian leaders..."
San Diego Union-Tribune, 10/15/02:
"His trip to San Diego was financed by the Mission Valley Christian Fellowship, which is raising money for him to take back to Jerusalem.
Olmert is scheduled to speak at a $1,000-a-plate dinner tonight at the Hilton La Jolla Torrey Pines, which church officials said will be attended by 800 people.
Local Palestinians are planning to protest the speech by Olmert, an Orthodox Jew, and San Diego police will be monitoring the hotel.
Proceeds from the dinner will fund a $500,000 gift to the New Jerusalem Foundation, headed by Olmert, said Leo Giovinetti, the church's pastor. The money will be handed out to victims of terrorism, both Jews and Palestinians, Giovinetti said..."
Palm Beach Post, 12/20/03:
At some charity events, the guest of honor's mere presence reaps thousands of dollars for a nonprofit organization.
But Israel's deputy prime minster, Ehud Olmert, wasn't so lucky at a charity auction at the Norton Art Museum Friday. With sparse attendance, Olmert had to leverage any political clout he had to raise money for the New Jerusalem Foundation, a nonprofit organization that aims to help underprivileged children of Jerusalem.
Forty-five Israeli artists along with three from South Florida (Britto, Amram Ebgi and Daniel Meyer) lent their talents for the project, which earned the organization about $250,000.
The New Jerusalem Foundation prominently featured its U.S. federal tax i.d. number on the contribution page of its defunct website. I suspect that the big donors used that i.d. number to support the tax deductibility of contributions made directly to the New Jerusalem Foundation in Israel.
But if the New Jerusalem Foundation, Federal Tax I.D. 02-0509486, never reported those contributions to the IRS, either the contributions went to a different entity or the foundation filed a false 990.
According to IRS rules, contributions to certain qualified Israeli charities are deductible but are limited to 25% of the taxpayer's adjusted gross income from Israeli sources.
Looks like Ehud Olmert and the boys have some explaining to do.
(Crossposted at TPM Cafe)
Update #1:
Gary Wallin died in 2004.
From the 3/25/04 Manchester Union Leader:
Gary Wallin, 63, Jewish activist, dies
MANCHESTER -- Gary P. Wallin, 63, of 11 Crestview Road, died March 24, 2004, at Elliot Hospital in Manchester after a long illness.
Mr. Wallin had been a resident of Manchester since 1969, when he purchased COMEX Inc., a communications and executive answering service company. In 1984, he established Mailing Corporation of America, a direct-mail company, and subsequently the Wallin Group, specializing in direct mailing for non-profit organizations.
Mr. Walling was active in many in many philanthropic organizations and especially active in supporting Israel and other Jewish organizations.
He was vice president of American Israel Public Affairs Committee and also served as treasurer of that organization for eight years.
He wrote a newsletter called Near East Report and served as president of Manchester Jewish Community Center, Manchester Jewish Federation and Temple Israel. At the request of the White House, he was present at the peace treaty signing between Presidents Menachem Begin and Anwar Sadat. He also attended the peace accords between President Yitzhak Rabin and Yasser Arafat. To enhance US-Israel relations, he and his wife, Irma, accompanied Senator and Mrs. Gordon Humphrey to Israel, and several years later made another trip with Rep. Bill Zeliff and his wife.
Mr. Wallin served Manchester as chairman of Manchester Airport Authority, president of Manchester Federated Arts Council, and many other organizations.
The family includes his wife, Irma (Holtzman) Wallin; five children, Ian Wallin, Amy Wallin, Justin Kudler, Michael Wallin and Amanda Kudler; and a sister, Susan Panitch.
Update #2:
Zvi Raviv in today's Jerusalem Post:
"What on earth is going on here?... Once this goes public," it's no big deal, former New Jerusalem Foundation director Zvi Raviv told the Post. "Is there [an] attempt to depose the prime minister by people who are supposed to keep law in this country? Every time this kind of affair hits the public arena, my confidence in justice fades," he said...
"Olmert asked me to come on board as his fundraising adviser for municipal projects. I saw that without Clause 46 [which allows for tax reductions for charity donations], I cannot do my job. So I initiated the establishment of the NJF in the US first and then a year later in Israel. And Ehud Olmert was the head of the foundation... I did the fundraising," Raviv recalled.
From its outset, the NJF courted controversy when it failed to register itself as a nonprofit organization with the Interior Ministry or to report millions of dollars in contributions in 1999.
This newspaper reported eight years ago that Jerusalem municipal "opposition members fear the mayor [Olmert] has been avoiding proper reporting of the foundation's activities because he has been using it to raise funds for his own political needs."
The allegations failed to stick, however, and the charity went on to register itself in Israel in 2000. In the US, it already enjoyed legal recognition, and was registered under the name of American Israel Public Affairs Committee treasurer Gary Wallin.
When Wallin passed away, Raviv searched for a new treasurer. He found Morris Talansky.
"I was looking for someone to do the same thing for very little money - we paid $500-$600 a month to Moshe Talansky. That included all of his expenses. I didn't want to spend money on bureaucracy; I wanted most of the money to go to Jerusalem. Talansky was our address," Raviv said.
Talansky's Long Island, New York, home address is listed as the New Jerusalem Foundation's American office.
"He was 90 percent a volunteer. And to involve the name of the NJF in the affair under investigation is a travesty of the truth," Raviv told The Jerusalem Post...
Zvi Raviv is out and out wrong. Morris Talansky was the NJF treasurer in 2002.
Again, if contributions made by American donors to the NJF were not made to the US NJF entity, they were very limited as to their tax deductibility*. Wallin and Talansky would have known this.
*According to IRS rules, contributions to certain qualified Israeli charities are deductible but are limited to 25% of the taxpayer's adjusted gross income from Israeli sources.