An internal audit into the conduct of Jeremy Newmark while he was chief executive of the Jewish Leadership Council reported that he deceived the organisation out of tens of thousands of pounds and misled charities about the cost of projects he worked on.

The JC has obtained a devastating report into the alleged actions of Mr Newmark — who is currently chair of the Jewish Labour Movement and narrowly failed to win the Finchley and Golders Green seat for Labour at last year’s general election — between 2006 and 2013.

In order to avoid a scandal, the JLC’s trustees decided to keep Mr Newmark’s alleged behaviour secret and not inform the police.
 
The trustees — including former chairman Sir Mick Davis, who is now chief executive of the Conservative Party, and property tycoon Leo Noé — accepted Mr Newmark’s resignation on the grounds of ill health after his seven-year long stint at the helm of the charity.

When presented at the time with the evidence of the internal investigation, Mr Newmark is understood to have acknowledged that the picture it painted “did not look good”. But the JLM chair, who was elected as a local councillor in Hertsmere last year, has consistently denied any wrongdoing and insisted he left the JLC because he was suffering from diabetes. He had been diagnosed with the condition six months before his departure.

In a statement to the JC on Wednesday, Mr Newmark, 45, denied that he had misused JLC funds or claimed inappropriate expenses. 

He also denied any wrongdoing surrounding the commissioning of his wife’s consultancy firm for a JLC project or the leasing of a £46,000 luxury car. 

In his statement, Mr Newmark also claimed that the JLC still uses him as a consultant. He said: “I continue to be consulted by both the JLC itself and JLC members on a range of issues.”

Responding to his claim, the JLC said: “This is categorically not the case. The JLC does not contract or engage Mr Newmark.”

Defending the actions the JLC took at the time, Sir Mick this week said the organisation’s trustees had acted immediately after they became aware of the issues. He added that in the wake of Mr Newmark’s resignation, no further action was taken out of regard for his health and family. 

Details of the 2013 investigation have remained undisclosed for the past five years. But now the JC can reveal that Mr Newmark was alleged to have:
* Billed thousands of pounds of “inappropriate” personal expenses to the JLC — including holidays in Israel and VIP transport for himself, his wife and their children
* Withdrawn thousands of pounds of unaccounted for cash on JLC credit and debit cards while failing to provide receipts to justify this expenditure
* Leased a new BMW car worth £46,000, paid for by the JLC, to which he fixed his own personal number plate — and then attempted to have his wife insured on the vehicle
* Employed his wife’s fundraising and events consultancy firm, Secure Prospects, to run a JLC-backed educational project, paying the company more than £36,000 — in spite of concern expressed by the governors of two leading Jewish schools that the project was not being properly managed
* Misled communal charities, including the London Jewish Forum and Chabad, over the true cost of projects in an attempt to secure larger donations
* Attempted to cover up possible financial irregularities by blocking communication between the JLC and its auditors, after staff became suspicious about his conduct.

Read the full report here >>

Mr Newmark joined the JLC as its first full-time chief executive in January 2006.

In the role he joined Sir Mick and other trustees at high profile meetings, including with Prime Minister David Cameron, where issues such as Jewish schools and shechita were discussed.

The JLC, which acts as an umbrella group for various Jewish community organisations, charities and pro-Israel advocacy groups, rapidly expanded over the next few years, despite criticism from some in the community that it was self-appointed and unaccountable.

Membership of the JLC included the chairs and presidents of synagogues of all denominations, leaders of the main communal charities and welfare organisations and representative bodies. 

The leaked report is a damning assessment of Mr Newmark’s behaviour, suggesting he showed “no adherence to JLC Expenses Policy”.

It tells of “thousands of pounds worth of expenditure every year on food, travel, taxis, parking, congestion charge, phones, equipment and trips abroad across JLC debit, credit and expenses, incurred by JN.”

It also states: “JN has commonly withdrawn cash while abroad which has been difficult to monitor.” 

This practice was only spotted after another JLC employee checked a bank statement.

Related: Read JC Editor Stephen Pollard's analysis

The report states that Mr Newmark billed the JLC main account £3,628.52 for a one-week stay at the Tel Aviv Hilton in August 2012. Mr Newmark had legitimately flown to Israel for a conference and meetings but his wife (the couple have since separated) and children then joined him in time for Shabbat. Other personal expenses incurred included the children’s room ($360), poolside food ($200), laundry and Friday night dinner. In total, £520.58 of personal expenses were added to the bill.

On his return to the UK, a JLC employee “raised concern with JN that the amount was so high”. The report adds that Mr Newmark “could not provide any paperwork for the stay”.

The JLC employee warned him that the amount needed to be settled immediately, “stating that the expensing of personal items on a JLC card would be seen as fraudulent and for reasons of good practice should be resolved immediately”.

The report records that Mr Newmark refused to accept that his conduct could be viewed as fraudulent.

He claimed that he would deal with the matter when he visited the Tel Aviv Hilton again but the report adds: “It has not been reimbursed and the matter is still outstanding.”

Thirteen months later Mr Newmark had still not settled the outstanding personal expense bill.

The findings also show that Mr Newmark used a Hilton Hotel reward scheme to pay for a further holiday with his family in Israel. The Hilton points scheme was registered to Mr Newmark’s email address but he had said it “is clearly for JLC purposes”.

With nearly 400,000 points banked in the JLC’s name (employees were encouraged to stay at Hilton hotels when travelling, in order to collect points), the report confirms that on July 31, 2013, “it became apparent that the 400,000 points had been taken and allocated against a five-night stay in the Hilton Eilat Queen of Sheba hotel for JN and his family”.

Related: Read Jeremy Newmark's full statement to the JC.

According to the report, Mr Newmark initially attempted to claim that the points had been incorrectly used for the personal stay — but he then attempted to justify the usage and said: “My Hilton account is my account. Points accrue from multiple sources, including my credit card, Hilary’s work and elsewhere. The JLC benefits from some advantages… but it’s not JLC owned.”

The report concludes that the 400,000 Hilton points could be valued “at approximately £2,350”.

It then details one of several issues concerning cash withdrawals made by Mr Newmark that went unaccounted for.

Cash withdrawn by Mr Newmark around the party political conferences in September 2011 was “written off” by accountants HW Fisher because “receipts were never found” and an “explanation could not be found”.

Three further cash withdrawals were made by Mr Newmark during a conference in Washington in 2012, amounting to $1,260. Only $200 was returned. 

According to the report, Mr Newmark did not respond to repeated attempts to get him to produce receipts. The outstanding amount was only paid back by Mr Newmark 14 months later.

On a second trip to a conference in Washington in 2012, Mr Newmark was handed a $400 float. The report states: “Only 10 blank taxi receipts were returned with no cash.”

It adds that Mr Newmark instructed a JLC employee to fill in the blank receipts at $40 each to “set against the amount missing”.

At the same conference it notes how “a number of transactions put directly on the JLC card” also “raised concern”.

Further withdrawals such as 2000NIS taken out in Israel in February 2013 are also revealed to have “gone unaccounted for”.

Expenses submitted for April-June 2013 are said to have totalled £2,338.69 with Mr Newmark also showing a fondness for mobile telephones.

The report says: “JN uses his JLC Blackberry as his personal phone and recently took out a contract for a new iPhone on the JLC account.

“Additionally JN has taken out three data plans for use in his iPads (purchased on the JLC) and as result JN incurs thousands of pounds worth of expenditure on phone related costs alone.”

Concern is also raised in the report over Mr Newmark’s habit of using VIP airport services when returning from Tel Aviv to London.

On one occasion he is said to have used the service provided by Laufer Aviation GHI Ltd for eight people in August 2013 when returning from a family holiday in Israel. The cost of £161.59 was billed to his JLC credit card.

The report says a JLC employee became aware of this “when a call from the company on the day diverted from his mobile to the office, asking if the family would need extra assistance with their bags”.

The report reveals that Mr Newmark leased a new BMW worth £46,000 to replace the Mini Cooper which had previously been used as a pool car by the JLC on occasions.

But the report adds that the Mini “was clearly being used as JN’s personal car (on which he put his personalised number plate)”. With a monthly cost of £627.11 coming to an end for the Mini’s lease, the report notes that it was suggested to Mr Newmark that the JLC purchase a cheaper vehicle. But he refused, leasing the BMW instead.

The report says: “Due to the high value of the car, the JLC paid £1,500 to insure JN on the car but could not justify insuring other staff due to the high premium”. But remarkably, Mr Newmark is said to have told a JLC employee to “investigate insuring his wife on the car”. The insurers are said to have refused “based on her driving history”.

Mr Newmark was later invoiced for £80 after the JLC incurred the cost to “transfer his personal number plate on to the new vehicle as requested”.

Mr Newmark also ran into problems over his use of a private driver while in Israel. After the driver said he had not been paid for journeys made in 2012, the JLC is revealed to have made a payment of £782.63 in February 2013 at Mr Newmark’s request.

By March 2013, the driver claimed to be owed a further £1,559.
After being queried about the bill the report says: “JN said he settled the bill from the external FPCG account.”

It adds: “This raised concern about cash being taken from the FPCG account and expenditure of a personal nature being incurred.”
 

Related: The £3,000 taxi fare row

The FPCG — the Fair Play Campaign Group — was a joint JLC and Board of Deputies venture aimed at countering anti-Israel propaganda put out by groups such as the Palestine Solidarity Campaign to the trade union movement and elsewhere.

The report also details how Mr Newmark employed Secure Prospects — a fundraising and events consultancy business owned by his wife Hilary — to provide advice for the Redbridge Educational Renewal Project which was overseen by Jonathan Goldstein, now chair of the JLC. 

Secure Prospects is revealed to have been paid £25,920 for the 12-month consultancy.

After the contracted period, further payments were made to the company, amounting to £36,720 in total.

The report reveals that three JLC accounts — the Schools Strategy Implementation Group (SSIG), Redbridge Educational Renewal Project and Partnership for Jewish Schools (PaJeS) — were used to make the payments to Hilary Newmark’s company.

But another JLC employee is revealed to have become “concerned” that invoices signed off by “both JG and JN” were not subject to “proper scrutiny”.

In a further development, that same JLC employee says they had “begun to receive complaints” both from Ilford Primary School and King Solomon High School that “the project didn’t seem to be properly managed”.

The report reveals how another company started by Mr Newmark’s wife — Energise Squared — received three “payments of £2,160” from the JLC’s PaJeS account. Mr Goldstein said he “didn’t know” what these payments were, according to the report.

Payments amounting to nearly £21,000 were made from the JLC Main and the FPCG accounts to the Jewish Activities Committee and other separate accounts.

A JLC employee raised concerns after being instructed by Mr Newmark to make payments and complete grant request forms. The report says the employee “became concerned about the increasing number of payments to these accounts and what the funds were being used for”.
The accounts in question were managed by Mr Newmark.

A JLC employee who opened a bank statement for one of the FPCG accounts noticed a payment of “£1,400 to JN’S Amex card” had been made. Asked about the payment, Mr Newmark said it was “expenses he was owed”.

The report also states: “A recent FPCG LTD statement shows a balance of £421.71 which is lower than would be expected based on payments made to the account.”

Further concerns are raised about alleged “misuse of Community Chest funds”. In May 2012, Mr Newmark was asked about “depleting funds in the main JLC account”. Community Chest funds held in the Special Projects account amounting to £25,000 were then transferred to the main account to plug the gap.

Mr Newmark is said to have claimed that the funds would be replaced later that year, but the report states that bad project budgeting “resulted in other projects running on deficit and drawing on Community Chest funds”.

The report adds: “JN often states he has cleared things with Mick Davis [the then JLC chair]”.

But it also states: “It is unclear whether Mick has been made aware that funds have been depleted in this way.”

During a 2012 audit, accountancy firm HW Fisher suggested: “Funds had not been used in the manner in which they were intended.”

In another extraordinary revelation, the report suggests that Mr Newmark “regularly inflated project budgets in order to source larger donations from donors who fund many projects and events in their entirety”.

In one instance, “a £7,000 surplus on Chanukah in the Square 2012 was similarly instructed by JN to be transferred to the main account despite JN indicating to the other event partners (Chabad and London Jewish Forum) that there was a deficit”.

A JLC employee is also said to have watched Mr Newmark “inflate most of the items of expenditure including those for which no expenditure was incurred and save a different version of budget which was then presented to the trustees”.

In around May 2013, Sir Mick is revealed to have sent the JLC a cheque for £171,400 “to be allocated to various projects”. But a JLC employee alerted Mr Newmark that Sir Mick had overpaid by £12,500.

The employee suggested that Sir Mick should be told, but Mr Newmark is said to have stated that the full amount “was for a specific purpose although he could not remember what” and that it should be put in the JLC main account.

Damningly, the report adds that “as a result of inflated budgets” there were “sometimes surpluses in relation to particular projects although these are shown to project stakeholders as deficits”. It concludes: “As a result funds donated to the JLC are often not used for the purpose for which they are originally intended.”

The report states that it appeared to be “standard practice in the JLC to falsify information relating to finances”.

It adds: “Member organisations are constantly overcharged on JN’s instructions, e.g. those who participate in the joint JLC stand at the Jewish Living Expo.”

It adds: “It appears that JN has made a concerted effort to prevent communication between staff members and third parties so as to provide cover for particular processes and practices.”

The report into Mr Newmark’s conduct was produced in September 2013 and discussed by JLC trustees on September 17.

The JC understands that Sir Mick and Leo Noé, a JLC vice-president, met Mr Newmark to discuss its findings on September 25. At the meeting, Mr Newmark accepted that the picture the report painted was not good, but did not admit any wrongdoing, other than poor administration.

At a subsequent meeting, Mr Newmark told Sir Mick the best course of action would be for him to resign.

But Mr Newmark proposed that in order to effect an orderly handover he should be employed as a consultant for a period. Sir Mick recommended to the trustees that Mr Newmark’s resignation be accepted on grounds of ill health. Mr Newmark had been diagnosed as suffering from diabetes six months earlier.

Sir Mick also proposed appointing Mr Newmark as a consultant on full salary together with reasonable expenses for three months. 

He also suggested that Mr Newmark should be paid an additional three months’ salary in recognition of his past service, and in acknowledgement of his ill health. It is understood Sir Mick proposed that this extra payment should not be met by the JLC but that he would arrange it separately.

It is also understood that Sir Mick told trustees he did not believe there was proof Mr Newmark’s behaviour had been prompted by a desire for personal enrichment.

The trustees involved in making the decision included Stephen Pack, then president of the United Synagogue; Vivian Wineman, then president of the Board of Deputies; Mr Noé; Gerald Ronson, chair of the Community Security Trust; and Sir Trevor Chinn, also a JLC vice-president.

The arrangement was agreed and Mr Newmark’s resignation was announced to JLC staff on October 2.

The JC contacted the JLC’s trustees, Mr Newmark and Mrs Newmark for comment this week.

Sir Mick, who stepped down as JLC chairman in 2017, said he had “at all times acted with the full knowledge and support of the trustees. 

“As soon as the board of trustees became aware of the issues, it acted immediately and in accordance with the advice it received.  

“Individual trustees ensured that the JLC’s accounts were made good and whole. Jeremy resigned due to ill health and the trustees agreed, with due regard to his welfare and that of his family, that no further action was warranted.”

Simon Johnson, the current JLC chief executive, who replaced Mr Newmark, said he had been made aware of the issue as soon as he was appointed to his role in October 2013. He continued: “I am satisfied that the then chairman acted at all times with the knowledge and full support of the trustees.

“Immediately upon my appointment, working closely with our auditors and our trustees, I put in place additional measures to enhance and improve the JLC’s financial control procedures. 

“We improved management accounting, tightened spending authority levels and put in additional approvals relating to payments from the bank. We have established best practice conflict of interest procedures and reporting of related party transactions. These are all documented in detail in our annual statutory accounts.”

Mr Pack defended the actions of the JLC trustees, saying: “The judgment that was taken at the time, particularly by the president [Sir Mick], was that any monies that were alleged to have gone were put back, so a charity wasn’t disadvantaged. And that it was in the best interests of the community that Mr Newmark should step down and go. It was not necessary to publicly humiliate him.”

He said the concept of lashon hara meant it would be wrong to sully Mr Newmark’s reputation. “I don’t think it’s the position of somebody who purports to be an Orthodox Jew to take that sort of action.”

David Rosen, Mrs Newmark’s solicitor, said she was “not aware of any financial irregularities or misuse of funds by her former husband during his time as CEO of the JLC”.

In a statement to the JC, Mr Newmark described the claims in the audit as “a politically motivated smear”. 

He added that he led the JLC “professionally from a start-up to a key part of the communal infrastructure to broad acclaim… It is easy to take things out of context and try to create a picture that is removed from reality.”

In a statement responding to the JC’s story, Peter Mason, national secretary of the Jewish Labour Movement, said: “JLM is a democratic organisation run by the National Executive Committee for our members.

“Every penny we raise goes entirely to the vital work we do, such as rapidly expanding our membership to over 2,000 members, training over 1,700 Labour Party activists in confronting antisemitism and engaging Jewish voters and reaching seven regions with 56 campaign days during the snap general election.

“JLM’s elected national officers have full oversight over our financial processes and we are confident they are robust.”

Related: Read all our coverage of the story