The JLC has more questions to answer

THE STILLUNFOLDING scandal around Jeremy Newmark, the former Jewish Leadership Council chief executive, should remind us that a charity’s most important asset is trust.

While our relationships with businesses are transactional — we exchange one thing for another — for causes we believe in we donate, volunteer and offer public support without expecting something in return.

When we lose trust in a business, we can still decide on a case-by-case basis whether to buy their products; but the loss of trust in a charity is an existential challenge.

Although it’s unclear which, if any, of the allegations reported by the JC last week were accepted by the JLC, the facts of the story which are publically known raise a number of further questions for the organisation’s trustees.

It’s not disputed, for example, that the JLC employed Mr Newmark’s wife as a consultant between 2011 and 2013; so why was this relationship not disclosed in the JLC’s accounts as a “related party transaction”?

When her first company went into liquidation in 2012, owing more than £90,000 in unpaid tax, was it appropriate for the JLC to renew the contract with a new one?

If the trustees allowed Mr Newmark to retain the money from invalid expense claims, was this in effect a pay rise, and if so did the JLC pay employment taxes on this additional sum?

Were the JLC’s Council — which comprises the senior leadership of most of the community’s major charities — even informed of what was being done in their name?

Even more concerning is the Charity Commission’s statement last Friday that it was not previously aware of the allegations. The charities’ regulator requires trustees to file a “serious incident report” for any alleged fraud (one piece of guidance on the topic begins, succinctly: “If in doubt, report”).

More than 2,000 of these reports were made last year by charities across the country, allowing the Commission to advise, monitor and confirm that the response was appropriate.

But if the Charity Commission’s statement that it knew nothing is correct, the JLC appears not to have complied with its obligations for any of the more than 40 allegations identified in their internal audit, from the diversion of Hilton points to the bald statement that “it appears to be standard practice in the JLC to falsify information relating to finance”.

These are not just technical, boxticking issues of legal and accounting compliance, or which relate only to the personal conduct of a single employee.

Since its inception, the JLC has been criticised for a lack of transparency and accountability, and the way in which the Newmark case has been handled would seem to confirm the worst fears of its detractors.

As Simon Johnson, the current JLC chief executive, said last year in the JLC-published Jewish Trustees Guide, “too often, charities are closed and secretive, whereas openness in charities builds confidence and trust amongst donors and service users”. Most worrying of all, however, is not a legal question but a moral one. The JLC has offered assurances that the matter was adequately addressed, but its silence allowed Mr Newmark to return within a couple of years to communal and national prominence without proper scrutiny into his alleged wrongdoing.

He has spearheaded the response to antisemitism in the Labour Party, and came only 830 votes away from election as an MP last year. The damage done to the legitimacy of these causes is immense, and entirely avoidable.

Even if a public announcement about Mr Newmark was inappropriate, the behind-the-scenes communications which the JLC prides itself on seems to have been totally absent when it was most needed.

On the smaller-scale of the Jewish community, this incident seems to demonstrate many of the failings which have devastated national organisations in the last decade.

Like MPs’ expenses, the JLC’s response to the allegations runs totally counter to our expectations of our leaders and representatives.

Like Kids Company, well-qualified trustees failed to adequately oversee an over-burdened chief executive with a seeming allergy to proper financial controls. And like the unfolding Oxfam scandal, the shortterm expediency of inadequate disclosure to the Charity Commission has meant that when the truth inevitably emerges, the damage to the charity and the sector in general is exponentially worse.

One of the most successful projects now run by the JLC is the Adam Science programme for young leaders. To mark its 20th anniversary, Jeremy Newmark’s old boss, the then-Chief Rabbi Jonathan Sacks, wrote an essay on the “Seven Principles of Jewish Leadership”.

The first of these was simple: “Leadership begins with taking responsibility”.

That seems like a good place to start.

A charity’s most important asset is trust’

Ben Crowne is the author of the Better Know a Jewish Charity series