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Sunday, December 30, 2007

Cash crisis tears apart Lubavitch

The Lubavitch movement in Britain has been plunged £1.5 million into the red, forcing it to close an expensive West End of London club for young Jews which had been open less than a year.

The funding crisis has left teachers at Lubavitch schools unpaid since April and caused splits in the leadership of the movement that pioneered Orthodox outreach in this country.

Rabbi Faivish Vogel, principal fundraiser of the organisation, is understood to have tendered his resignation last Friday, following the departure in November of his sons Rabbis Yosef and Mendy Vogel, who ran the Gaon Club off Bond Street, a prime Central London location.

Supporters of Lubavitch were told in a letter that “by far the largest proportion” of donations secured by the movement’s fundraising arm in recent years had been spent on the club, including “almost all” of this year’s £750,000 yield.

As a result, the movement had amassed large debts “in unpaid teachers’ salaries, bank loans and unpaid PAYE”, wrote Rabbi Shlomo Levin, recently appointed as a trustee of the Lubavitch Foundation to help plug the financial black hole.

Rabbi Levin confirmed to the JC this week that the movement’s debts now amounted to £1.5 million, although donors had stepped in to pay the teachers’ wages. If further funds could not be raised to cover the shortfall, the movement would probably have to “sell off an asset”, he said. “It’s early days yet.”

Differences between the Vogels and the Lubavitch Foundation culminated in a hearing at the London Beth Din, which issued a ruling two weeks ago. Rabbis Yosef and Mendy Vogel were barred from conducting outreach activities for six months without permission of the dayanim and from using the names “Lubavitch” or “Gaon Club”.

According to the rabbinical court judgment, a “rift” opened between Rabbi Faivish Vogel and his then fellow-trustees of the Lubavitch Foundation, Rabbis Nachman Sudak and Yitzchok Sufrin, who reported complaints from Lubavitch donors “alarmed by the lavish expenditure on The Gaon Club in its glitzy new premises”.

But Rabbis Yosef and Mendy Vogel felt undermined by “backstabbing emanating from the very highest echelons of the Lubavitch establishment” and a “whispering campaign” accusing them of “excessive expenditure and accounting irregularities”.

They maintained they had been “scrupulously honest” and had been “forced out of an organisation which they loyally served”. The Beth Din is due to hear a claim from the brothers that Lubavitch had “constructively dismissed” them.

The Gaon Club began some years ago as a series of ad hoc events, mainly for young professionals and business people, before moving in January into its elegant new home, the floor of an Adam building equipped with plasma TV screens and internet terminals. The premises, according to the Beth Din papers, had been offered rent-free by a businessman, Colin Gershinson.

Rabbi Sudak, the foundation’s principal, said: “The activities of the Gaon Club are laudable, but contrary to our expectations did not raise the necessary funds to support the ongoing Lubavitch commitment to schools and other activities.”

The Lubavitch network, which comprises schools, Chabad Houses and other outreach ventures, runs to an annual budget of £6.5 million. Rabbi Levin wrote that it was “obligated to close the Gaon Club in its present form”.

Rabbi Yosef Vogel said a statement would be issued in due course.

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