Israeli Consulting Firm Sues Hadassah For $20M Over Missing Compensation
Image by haaretz
Updated, June 20
An Israeli consulting firm is suing the women’s Zionist group Hadassah for more than $20 million over unpaid fees, Legal Newswire reported last week.
The lawsuit revolves around Hadassah’s struggled to retain its hospital in Jerusalem during a budget crunch in 2013-14. Free World Ltd., a consulting firm led by David Spector, worked as Hadassah’s negotiator and chief strategic adviser during this time, and now alleges that he was not compensated for his work.
During this period, Hadassah faced such a large economic crisis that it seemed certain the Israeli government would take over ownership of the Hadassah Medical Center. The organization had felt the funding reverberations of the 2008 recession, and, in 2010, was made to pay back $45 million earned from Bernard Madoff’s Ponzi scheme.
Before Spector stepped in, Hadassah had agreed to surrender ownership of the hospital to the Israeli government, but with his work, the organization was allowed to retain full ownership and receive what Legal Newswire called a “large-scale government-funded recovery plan.”
However, the suit says that the retention of this ownership helped Hadassah and affiliated offices illegally make “a huge financial gain at the expense of the Plaintiff [Spector].”
Such gains allegedly included an arrangement that established Hadassah as the sole fundraiser for the medical center, which the organization extracted a 14% commission on. Additionally, they received exemptions from tax payments. The suit says the defendant organizations received billions of shekels through these arrangements.
Hadassah national president Ellen Hershkin denied his claims.
“Mr. Spector/Free World are making false statements and claims to obtain charitable funds from Hadassah to which they are neither entitled nor deserve,” Hershkin said in a statement. “Free World was paid for its services on Hadassah’s behalf. Spector’s claims are without any merit and Hadassah will defend itself vigorously in the courts of law where Hadassah has no doubt that Free World/Spector’s claims will be proven false.”
Juliana Kaplan is a news intern at The Forward. Email her at kaplan@forward.com or follow her on Twitter, @julianamkaplan
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