Thursday, January 19, 2012


It was only a short while ago, while reviewing JFNA's By-Laws (something its leaders might consider doing but I admit its easier to ignore them if you have no idea what's in them and just want to change them so much), that I came upon an Amendment just one year old. You probably had forgotten it as had JFNA's leaders, The JFNA Resolution of December 16, 2010, provided, among other things, for the termination of ONAD  (surprise, it's back, only much, much worse), and, then in pertinent part: "...the agreement pursuant to which JFNA guarantees the UIA revolving term loan requiring consent by the lending banks to any change in the ONAD methodology..." continuing that "...this resolution shall be subject to referral of the proposed ONAD change to the lending banks to obtain the banks' consent."

OK? Simple, right? 

I sent the Resolution on to responsible leaders questioning whether the GPT change had likewise been referred for lender consent. Oooooops. Turned out the December 2010 termination of ONAD HAD NEVER BEEN REVIEWED WITH JFNA's BANKS, let alone the GPT Resolution. So, by the time my Post -- A Prescription for Chaos -- published on December 22, JFNA thought they could say "what's Wexler writing about? He's so wrong." After all, we live in what Paul Krugman has termed "the post-truth era." But, and this is big "but" -- having negotiated with so many Banks over the course of my law practice, in such a complex organizational environment, I would guess that all the lenders said, was, when they got JFNA's Cliff Notes explanation of the changes, "we want some times to look into this," no consent, just temporizing. The assumption is that the UIA loan will continue to be paid down out of whatever allocations to JAFI core remain after the devastation that the GPT will wreak.

But, there's the rub. The explicit intent of the GPT sponsors (and many federations, sadly) is to eradicate the federations' core allocations to JAFI and JDC. At the end of this calendar year, only those federations which have represented to the Joint and JAFI that they will continue core allocations at current levels will continue to do so (JFNA clearly will engage in no advocacy on the "partners'" behalf). But, if no other federations join them, those federations will be supporting the repayment of $53 million plus interest. And, where's JFNA? Out of touch, in the dark...CLUELESS.

This is how our system works today. And, yes, no one thanked me. Hard to believe, I know.


1 comment:

Anonymous said...

I think I remember that during the Operation Exodus the federations guaranteed a loan about $1 billion. In our federation was asked to take on about $2 million of that guarantee. The documents accompanying that were enormous and several lawyers poured over them for quite some time. The main sticking issue was that our federation seemed to be proportionately liable for the default by other federations. During those days there was huge trust in the system and our federation accepted the guarantee (I think over 90% of the money ended up being guaranteed similarly.) Obviously every federation came thru and the loan was eventually paid off I assume.

Now we have another situation. What is the legal responsibility of the federations collectively or separately to pay down a loan taken out by JFNA (guaranteed if you prefer) if the federations "own" JFNA?