All 501(c)3s must file their 990s within 11.5 months from the end of their fiscal year. Recent legislation has allowed the IRS to automatically revoke a group’s exempt status after missing three consecutive years of filings.
During this same time period the salary of the organization’s president increased a whopping 38%. Despite this fact, in May of 2013, the organization’s tax-deductible status was reinstated, but a multitude of questions still remain unanswered.
On March 9-10, the ZOA will be holding their national elections in Philadelphia and the method in which elections are held has raised concerns for Steven Goldberg, a Los Angeles attorney who is the National Vice Chairman of the ZOA and is running for its presidency against incumbent Mort Klein who has held the job for 20 years.
“While I have a great deal of respect for Mort Klein and his leadership of the ZOA, there are issues of transparency that need to be addressed in order for the organization to retain its credibility,” said Goldberg.
Presenting a formidable challenge to Mort Klein for the national presidency of the organization, Goldberg charges the ZOA head with the intentional suppression of information to donors about the organization losing its tax exempt status in his newly constructed web site. “Mort told employees at the ZOA not to notify our donors that the tax exempt status had been revoked and that is the point that we began to have serious disagreements. He was lying by omission,” declared Goldberg in an interview with The Jewish Voice.
He also said that the ZOA donor base has drastically diminished in the last 5 years and that precise membership numbers are unclear. “Right now, we have only 9400 names on our mailing list, despite the fact that the official ZOA web site suggests that there are 30,000 members,” said Goldberg.
In an interview with The Times of Israel, Klein rebuffed Goldberg’s allegations by saying, “We hired tax lawyers pro bono, and they advised us that legally, there was no requirement to put out a press release about the change in status. All we were required to do was to make sure that we did not write anywhere that we were a non-profit.”
Klein further claimed that due to a “glitch” and a “technical mistake” the filings to the IRS were not made for three years and that resulted in the revocation.
This explanation however does not satisfy Goldberg, who told the Times of Israel, “I’ve been on the board since 2008 and the national vice chairman since 2010, and I have not once seen a budget for the organization.”
In December of 2013, The Forward reported that with a budget of “slightly more than $3 million” in 2012, and the ZOA paid Klein a salary in 2011 of ”$435,050; 93% more than the predicted salary for an organization this size.” Yet 990 tax forms, which were notably absent from the website Charity Navigator but obtained by the Jewish Voice, indicate that ZOA’s total fundraising revenue for the year 2011 was $2,489,000, and Klein took home a $518,869 paycheck. And for the next year, 2012, ZOA collected $1,422,850 in total fundraising with Klein taking away $472,764 in salary.
The Times of Israel reported that “Klein earned $315,385 in 2007, the last year for which filings are publicly available, however in 2008, the year in which taxes were not filed with the IRS, Klein’s total compensation was a staggering $1,245,851.” Again, data collected by the Jewish Voice by way of 990 tax forms show that for the year of 2007, the organization’s total fundraising efforts yielded $3,387,080 of which Klein was paid the handsome sum of $315,000. More startling is that the year in which Klein collected the jarring figure of $1,245,851 the group’s total fundraising reached $2,288,332. The meaning here is clear – Klein walked away with more than 50% of what ZOA earned in total fundraising for the year of 2008.
The remainder of the data collected by the Jewish Voice revealed the following: total fundraising efforts for the ZOA in 2010 yielded $3,446,187, for which Klein walked away with $467,818 in salary. The previous year, 2009, the fundraising efforts totaled $2,144,693, with Klein taking home another whopping paycheck to the tune of $717,700.
For Klein’s part, he has responded to questions about the substantial hike in his salary by telling The Forward that this was compensation for his first five and a half years at the ZOA, during which he asserts that he worked gratis for the organization. “I took over a bankrupt organization with no money in the bank and with very little activity,” Klein said.
The Forward also reported that the” ZOA has an unusual arrangement under which most of Klein’s salary is covered by a designated gift from one of the organization’s major donors.” Unnamed sources close to the ZOA have intimated that Las Vegas casino magnate Sheldon Adelson is paying Klein’s salary, but that could not be confirmed.
Goldberg further alleges that rules regarding the upcoming ZOA elections mitigate heavily in favor of Klein retaining his position and his hefty salary. “While the ZOA constitution mandates that voting take place in person, this would preclude a lot of people from voting because they simply cannot travel to Philadelphia during a weekday. Why can’t people vote by proxy over the phone or online? Why can’t the election take place in a city that is not Klein’s hometown?” asks Goldberg.
In a brief phone interview with The Jewish Voice, Klein said of Goldberg; “All of his allegations against me are 100% false. There are no controversies in the ZOA at all. He is a despicable liar.” The Jewish Voice posed a series of written questions to Klein, but as of time of publication, had not received a personal response.
In a memo dated Jan. 30, ZOA National Executive Director David Drimer informed ZOA board members that only members present at the convention will be able to vote.
Having run unopposed for years, Klein is facing Goldberg as the first challenger for his position since 1993, when he unseated then incumbent president James Schiller.
Because Goldberg has set up a web site which claims to “expose Mort Klein” the tensions in the ranks of the embattled ZOA are palpable, with some members feeling betrayed.
“We have witnessed a disintegration of the ZOA’s effectiveness; it has become stale,” said CUNY trustee Jeffrey Wiesenfeld, who said he is a member of the organization. “We definitely need a fresh, younger face in the ZOA because now more than ever Jews are in unprecedented danger around the world and we need strong leaders who can create a vibrant, activist movement,” added Wiesenfeld.
Wiesenfeld, a visible figure in New York’s Jewish community has taken leading roles in supporting Israel and focusing on the inherent dangers of a nuclear powered Iran. In an interview with The Jewish Voice, Wiesenfeld questioned the wisdom of AIPAC in demurring from its previously held hardline position on sanctions instituted against Iran and said that we need a strong ZOA to augment AIPAC in order to boldly advocate for Israel’s survival.
“I am not here to denigrate Mort Klein, but the ZOA needs a massive overhaul for it to be effective with its tiny budget,” added Wiesenfeld.
If elected president of the ZOA, Goldberg said he has big plans to intensify the growth of the organization. “I believe that the ZOA could really impact American politics and its relationship with Israel by not only remaining a 501(c)3 corporation that is limited to educational goals but by becoming a lobbying organization and working with elected officials towards a clear policy of support for Israel, “ he told the Jewish Voice. “That is why I’d like to have the ZOA evolve into a 501(c)4 organization. It is especially important now, when this suicidal US initiated Middle East peace process foists upon Israel a “two state solution” which can only spell complete and utter disaster for the Jewish state,” he added.