Leviev Woes Threaten Russian Schools

MOSCOW, Russia — The largest system of Jewish schools in the former Soviet Union appears to be in danger of collapse as its main benefactor, Israeli billionaire Lev Leviev, makes major cutbacks in funding to the Or Avner Foundation network. Leviev, who reportedly pumped some $20 million a year into the Or Avner system, is facing severe financial reverses to his international business empire due to the world economic crisis.

Well-placed sources in Israel told The Jewish Week Monday that Leviev’s funding has been “frozen” and that some Or Avner schools may have already closed. Or Avner officials deny this, saying only that Leviev has asked schools to cut their budgets.

Leviev, an Uzbekistan-born self-made magnate who made his fortune in diamonds and real estate, has seen the value of his Africa-Israel Group stock plummet 90 percent over the past 18 months on the Tel Aviv stock market.

Leviev’s money woes have also caused financial crises for several Or Avner schools in the U.S., including the Queens Gymnasia in Elmhurst. The school is populated largely with Bukharian Jewish students who have — until now — attended free, thanks to Leviev’s largesse.

According to Zalman Zvulunov, director of Or Avner in the U.S., parents at the Queens Gymnasium are being asked for the first time to pay a portion of their children’s tuition. Some teachers’ jobs are being eliminated, Zvulunov said, while others are being asked to work longer hours.

Founded in 1992 by Leviev and named in honor of his late father, the Or Avner Foundation is the educational wing of the Federation of Russian Jews. The federation is the Chabad-Lubavitch-dominated umbrella body that serves as the central Jewish organization in Russia and across many of the other states of the FSU.

According to Rabbi David Mondshain, the Moscow-based director of operations for the Or Avner Foundation in the FSU, Or Avner includes 75 day schools across the FSU and 20 other educational programs, including kindergartens and higher educational programs serving a total of 8,500 students in day schools and 13,000 overall.

Mondshain declined to give a total amount for Or Avner’s annual budget except to say it is “a few million dollars a month.” But informed sources put the figure at about $60 million a year, of which about a third is said to come from Leviev.

The system also receives funding from the Jewish Agency — although much of that funding appears at risk as well due to ongoing financial difficulties at the Agency. Other sources of funding are Russian-Jewish billionaire Roman Abramovich, New York-based financier George Rohr and wealthy Jews throughout the FSU.

Rohr declined comment when asked whether he will continue funding Or Avner schools at the same level as he has done in the past.

The unraveling of Leviev’s financial empire goes much further than the stunning fall of the value of Africa-Israel stock on the Tel Aviv market. The company’s credit rating has also plunged in recent months.

According to a recent report in Ha’aretz, capital markets “seem dubious as to their ability to repay the NIS 23 billion the group owes. The bankers are also worried and want more collateral from Leviev.”

The crisis in the Or Avner school system is only the most visible manifestation of an escalating crisis that threatens to put at risk the dramatic progress to build a vibrant Jewish life in the FSU over the past 15 years.

“The difficulties confronting the day schools is [that they are] the canary in the coal mine — a warning of a much larger impending crisis affecting Jewish life in the FSU due to the worldwide economic crisis,” said Asher Ostrin, director of the FSU Department in the American Jewish Joint Distribution Committee (JDC); the JDC funds many social welfare programs in the FSU, but not day schools.

“That crisis,” Ostrin continued, “is causing a sharp diminution of funding for Jewish programming from both local sources and international Jewish organizations. It is going to impact many other areas such as programs to alleviate the plight of poor Jews and to provide pensions to the elderly.”

Asked about reports in the Israeli media that Leviev recently informed Federation of Russian Jews and the Or Avner Foundation that he is cutting off all funding for Or Avner schools in the FSU, Federation spokesman Baruch Gorin told The Jewish Week: “I do not have this information. As far as I know, Mr. Leviev informed the Foundation that he will cut his funding by one-third, but will keep providing two-thirds of what he has given us until now. As a consequence, we have asked the local rabbis to find new local sources of funding to make up the difference.”

Asked about comments from a source in Israel with intimate knowledge of the situation in the FSU that several Or Avner schools have already shut their doors, Gorin said he is not aware that any schools have closed.

According to the source, “All the reports we are getting from our sources in the FSU is that the Leviev funds are indeed frozen. The reality is that Leviev is simply not liquid at this point, so he has no funds available to support his schools in the FSU.”

For his part, Mondshain denied as “not correct” reports that Leviev has frozen all of his funding of Or Avner. But he acknowledged that “Mr. Leviev has ordered us to find ways to lower expenses, and our schools have already been making cuts. Some parents are being asked to pay for tuition and transportation, which was not the case before. The situation is made even worse by the fact that since September another of our major donors, the Jewish Agency, has totally stopped sending us money.”

Asked about reports that provincial Or Avner schools like one in Karaganda, Kazakhstan, have already closed, Mondshain replied, “No, none of the schools have yet closed. Karaganda and many others are calling us on a daily basis appealing for money to help them pay the bills, but all have stayed open, with the exception of a small school in Khemelnitski, Ukraine, which was in trouble well before the financial crisis.”

Mondshain added that the situation of the schools in Ukraine is especially dire because the economic situation in that country is even worse than in Russia. “We have schools in Ukraine that have money in troubled banks which are not allowing them access to their accounts,” he said.

Mondshain said that Or Avner is now transferring money from relatively well-off schools in places like Moscow and St. Petersburg, which have substantial support from donors other than Leviev, to schools in the hinterlands that are in truly desperate condition.

Osip Akselrud, the Kiev-based director of Hillel in Ukraine and in other former nations of the FSU besides Russia, commented, “There is great concern here that only a few of the Or Avner schools in Ukraine will manage to survive this crisis. Vadim Rabinovich [the wealthiest Jewish businessman in Ukraine] is trying to find a solution to keep the schools going, but he is unable to do it on his own.”

While Or Avner is by far the largest network of schools in the FSU, two other Jewish school systems in the FSU, the Shma Yisrael schools (mainstream Orthodox) and ORT schools (secular) are facing sharp cutbacks as well.

Last year, the three school systems (which are together known as the Hefziba Network) received a total of $600,000 from the Jewish Agency, but those funds have been eliminated in the new budget.

Alan Hoffman, director-general of the Jewish Agency’s Department for Jewish Zionist Education stated,

“The Jewish Agency has been forced as a result of major budget deficits to cut services to all Hefziba schools, including Or Avner, but these programs will continue and the schools will continue to get support. JAFI has already begun to make a major effort to secure designated funds for this important project among donors in North America. The Toronto Jewish community has already raised over $400,000.”

Leaders of the major Jewish organizations in the former Soviet Union are beginning discussions on how to save Or Avner and other schools in peril. But they acknowledge it will be difficult, especially in light of a fractious history with intense rivalries between the Chabad-dominated Federation and other non-Chabad bodies.

Rabbi Pinchas Goldshmidt, the chief rabbi of Moscow, who has had a long and bitter rivalry with the Federation’s Lazar for control of the religious life of the Russian Jewish community said, “There has been no united community response to this situation because unfortunately the Russian Jewish community is not united. Everyone is on their own, and maybe it’s better that way.”

Yevgeny Satanovsky, president of the Moscow-based Institute of Middle East Studies and an astute observer of the Russian Jewish scene, commented, “There are certainly people in the community that don’t like Chabad who are happy about this situation. It is reminiscent of the old Russian saying that ‘You are happier if your neighbor’s cow dies than if you yourself get a second cow.”

Satanovsky added, “Or Avner schools provide a warm, halachic climate for Jewish children. They are generally not on a high academic level, and most Russian Jews don’t send their children to them. Certainly, none of the people who want their kids to go to top universities will send their kids to the Or Avner schools.”

Yet according to a source in Israel with knowledge of Jewish life in the FSU, “It is easy to sneer at Or Avner, and say their academic standards are not as high as the Ramaz or Heschel schools in New York.

But they provide a Jewish educational framework for thousands of Jewish kids in towns and cities across the FSU, many of them from deprived homes.”