Top American professional of an international Holocaust restitution commission investigated for allegedly misappropriating commission funds

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From Jewish-American paper The Forward:

New York, Friday, November 1, 2002

Restitution Exec Was Probed on Spending

Sher Resigned After Inquiry

By Nacha Cattan,
FORWARD STAFF

THE top American professional of an international Holocaust restitution commission was investigated for allegedly misappropriating commission funds for personal use before resigning last summer, according to sources and an internal document written by the commission's chairman.

Neal Sher, former chief of staff in the Washington office of the International Commission on Holocaust Era Insurance Claims, was investigated by the commission after admitting "unauthorized reimbursements of his ICHEIC travel expenses," the internal commission document states. The document was written by the chairman of the Holocaust commission, former secretary of state Lawrence Eagleburger.

Following the investigation, which was subjected to a "review" by a former FBI chief, Judge William Webster, Sher resigned in June and paid "full and immediate restitution," the document states. A source with direct knowledge of the situation, as well as other sources close to the commission, verified the existence and content of the document.

Although these allegations were made, the Forward has not established that they are true.

Sher is widely admired for his groundbreaking work as the federal government's chief Nazi hunter during 11 years as director of the Office of Special Investigations of the U.S. Department of Justice. During that time he oversaw the denaturalization and deportation of dozens of onetime Nazi war criminals. He also led the investigation into the Nazi past of Austrian president Kurt Waldheim and was credited for Waldheim's placement on the watch list of persons ineligible to enter the United States. After leaving the OSI in 1994 he became the executive director of the American Israel Public Affairs Committee, a post he held for two years.

But Sher's tenure as head of the Holocaust insurance commission was stormy almost from the outset. Under his watch, the commission was subjected to criticism from Holocaust survivors and members of Congress for allegedly exorbitant administrative expenses, including spending for travel, according to press reports at the time. The controversy was reported in the Forward as well as the Baltimore Sun and the Los Angeles Times.

The commission document describing Sher's alleged "unauthorized reimbursements" is addressed to Pennsylvania insurance commissioner Diane Koken, who chairs the commission's five-member finance committee. The document is dated June 25, 2002, five days after the commission officially announced Sher's resignation.

Sher first admitted his actions to Eagleburger, who regarded them as "probable improprieties" and placed Sher on "administrative leave" pending an investigation, the document states. Eagleburger then asked the commission's legal counsel, Tom Howard, to conduct a "fact-finding investigation" and enlisted Webster to review the case, according to the document.

Following Judge Webster's reply to Eagleburger (left), the document states, Eagleburger "accepted Mr. Sher's resignation" effective June 20, 2002 and "obtained full and immediate restitution."

Sources close to the commission told the Forward that Sher had been alleged to have carried out a misappropriation by improperly claiming reimbursement for his air travel.

The Baltimore Sun, in an article on the commission's administrative costs published on July 7, 2002, reported on Sher's air travel expenses. The newspaper claimed that commission financial records showed that in 1999 Sher spent $136,563 in travel expenses, mostly for travel to Europe. "Sher's first-class or business-class airfare to Rome, Berlin and other cities often totaled $5,000 or more per trip," the article stated.

The insurance commission was formed in 1998 by survivor organizations, state insurance commissioners, representatives of Jewish groups and the Israeli government and European insurance companies including Germany's Allianz, France's Axa, Italy's Generali and Switzerland's Winterthur and Zurich. Funded by the companies, the commission seeks to resolve and pay claims by survivors and heirs of Nazi victims who contend companies refused to pay their families' life insurance policies.

One member of the insurance commission, Roman Kent, a Holocaust survivor and treasurer of the Conference on Jewish Material Claims Against Germany, told the Forward that he had no prior knowledge of the existence or content of the internal commission document. Upon hearing about the document Kent said, "if full restitution was made and [Neal Sher] resigned, I think that should be the end of the story."

An Israeli representative on the commission, Bobby Brown, told the Forward that he too had no prior knowledge of the letter's existence or content. He added: "If what the Forward says is accurate about this matter, it appears that all sides took this incident with a great deal of seriousness, and the public's interest was protected and the matter seems to have been handled properly."

"I know that in the past [Neal Sher's] work on behalf of tracking down Nazis, expelling them from the United States was heroic," Brown said. "His work on Waldheim was really an incredible piece of investigation and for that he will be remembered. As far as any improprieties that he's accused of, I have no information of this."

Sher did not return phone calls seeking comment. Several other commission members contacted by the Forward declined to comment for the record.

The commission had come under fire from some members of Congress and Holocaust survivor advocates for spending excessively while delivering little compensation. As of July 2002, operating expenses totaled $40 million, while only $18 million in payments had been offered to claimants, according to commission officials.

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