A CAUTIONARY TALE OF SYSTEMIC FAILURE

Following our article on February 6...

This is a cautionary tale -- it is what happens when community professionals and JFNA professionals are allowed to operate without accountability, and when lay leadership fail to meet their responsibilities. It represents systemic failure of the worst kind.

When the Jewish community of St. Paul, Minnesota, changed its name It announced:

“While our name is changing, our mission is not. We are and always will be the organization in St. Paul that builds and sustains our Jewish community, educates our children, feeds the hungry, provides for our elderly, responds to emergencies and helps Jews in need in Israel and around the world.”

What the leadership, or what passed for it, of what is now the Jewish Federation of Greater St. Paul didn't announce at the time was that its former long-time CEO and an unspecified number of communal leaders, who chose not to know, had, in a passive if not active manner worked with professional leaders of JFNA -- yes, our JFNA -- in what can be characterized as a cover-up of the community's $3 million accounts payable balance built up over years of unpaid overseas core allocations due the Jewish Agency for Israel, the Joint Distribution Committee and WorldORT. 

Yes, as disclosed in TC JewFolk, https://tcjewfolk.com/amidst-financial-struggles-st-paul-federation-looks-to-move-forward/, in every year forward from 2008, the St. Paul federation sent letters assuring an overseas allocation, and, for every one of those ten years...each and every one...St. Paul did not comply with the commitments it made. This outstanding liability owed to JAFI and JDC and WorldORT, grew over the decade from $100,000 to $3,000,000 and JFNA raised no issues, contacted no communal lay leaders, and wholly failed to communicate that membership in JFNA required compliance with outstanding financial obligations -- after all Dues were being paid, weren't they?

In fact, the only local Federation person whom JFNA senior professionals may have contacted over that time was the same long-serving federation CEO who was the person sweeping this reality under the rug. At no time did JFNA raise the horrific account receivable, raise any issues at all, with local leaders. The St. Paul Federation Board of Directors Minutes dating back to October 2017 through the end of 2018 recite that JFNA professionals told the new CEO (who left the community after little more than one year) to tell no one. And, at no time over that decade did JFNA's professional leaders alert the true owners of what became a $3,000,000 debt owed to them -- JAFI/JDC/WorldORT -- that there "might be a problem."

These local leaders, at the initiative of the then newly hired Chief Executive,  upon "discovering" this accumulated/accumulating account payable  apparently hidden in some way by the Federation's long-term retired CEO, reached out to JFNA and, ultimately, allegedly were told by those lacking any authority to do so, to "just write it --the "it" being the $3,000,000 receivable -- "just write it off." And,  to keep this Draconian information from the Federation lay leadership...an allegation denied by a JFNA flack.

It was always right there: right on the pages of the Federation's Annual Financial Statements. First listed as a large unidentified Account Payable transformed on the 2016 Financial Statement to "Due JFNA" -- an incredible amount given the stagnant state of the St. Paul Annual Campaign. We do not know how this past due amount was shown on the books at 25 Broadway, if at all. Perhaps, someone might wish to question the JFNA CFO (whose response to most inquiries has become a rote "it's confidential").

This entire matter came to light when the long- (too long) serving St. Paul CEO retired and his successor began to ask questions: serious questions, questions that his Board over the years should have been asking. Questions that would have disclosed that the Federation Annual Campaign results announced to the community were a fraud; that allocations to overseas needs had not been paid (or had been vastly underpaid) for years while local allocations were paid as if the overseas account was an ATM. 

So what did JFNA do? The 2018 Federation Minutes reflect exactly what was going on -- as St, Paul's Board had allowed itself to be left in the dark on how the "Account Payable" had been built up over years; now the JFNA professionals would leave their Board behind, preempting the write-off process absent any governance authority to do so. (The JewFolk article does report that JFNA cut a "deal" with St. Paul -- a write-off of $3,000,000 for a promise to pay JFNA [presumably for overseas] 10% of its annual campaign going forward.) At no time were JAFI/JDC/WorldORT engaged on what was, in fact, a write-off of their allocations/funds.

The St. Paul Minutes reflect that the Board and new CEO were first concerned with the massive Federation debt disclosed in the 2017 Financial Statements. It is clear that St. Paul leaders were negotiating with the JFNA CEO, the COO and the CFO. Then...

• On May 23, 2018 the Minutes recited: 

"JFNA Write-off Status: JFNA’s CEO unofficially agreed that JFNA would write off our debt of $3.2 million; however, JFNA has not held an official vote. The target date is May 29, but that might be pushed back by a week to coincide with JFNA’s national board meeting."

• Then silence until October 2018 when the Federation CEO announced to the Board:

"Rob Jacobs (the then CEO) announced the JFNA agreed to write off all outstanding debt for the St. Paul Jewish Federation, with the stipulation that we commit at least 10% of our annual campaign to JFNA."

And, since...nothing....except the November Minutes disclose that now this CEO had resigned, and then the excellent, in-depth expose on the pages of JewFolk.

Friends, it is obvious that both the lay leadership of the Jewish Federation of St. Paul and at JFNA need to immediately examine these circumstances and take the necessary actions: And, JAFI/JDC/WorldORT need to assert their rights to allocated funds.

• The St. Paul Board leaders who failed in their stewardship of donors' funds need to immediately resign. They failed in their fiduciary responsibility;
• The JFNA lay leadership must determine through an independent investigation whether members of their senior management advised others to hide this payable from St. Paul's lay and professional leaders, and, then, if so, immediately let them go. 
• JAFI/JDC/WorldORT need to creat a joint venture the purpose of which shall be two-fold: to advocate for increased core allocations and cash collections and distribution of federation overseas core allocations.

How is it possible that in its Recommendations, the JFNA Global Operations Committees demanded that JFNA itself lead global advocacy when the reality is that not only has JFNA proved over the past decade its own lack of interest in and ability to do so, but has led a write-off effort that has resulted in millions lost to the overseas beneficiaries? The Recommendation is specious.

It is clear that the massive failings here arose out of an expressed policy of "getting out of  the professionals way" unencumbered by any accountability. Can anyone doubt that the JFNA senior professionals, like the retired St.Paul CEO, considered themselves to be empowered in ways that led to the outcomes in St. Paul reported in TC JewFolk? And the question is no longer "how did this happen?" -- that evidence is now right in front of all of us -- the question is: did JFNA "authorize" similar allocations write-offs in other communities-- how many and how much?

This is a sad chapter among sad chapters. If those at both St. Paul and JFNA fail to take strong actions and then demand accountability -- of themselves and of their professionals going forward -- the system is no more.

No more.

Rwexler