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Peru's small Jewish community is shaken by scandal, corruption
JTA / July 9, 2003

By Larry Luxner

LIMA, Peru — The first lady of Peru, Eliane Karp, is Jewish. So is the country's second vice-president, David Waisman. And under former President Alberto Fujimori, the Peruvian economy was supervised by a Jewish finance minister, Efraín Goldenberg.

Yet the nation's 3,000-member Jewish community — an island of wealth in the midst of 25 million poor people — has been shaken by various unrelated scandals that have resulted in the imprisonment of some of its most prominent members. This, combined with general economic and political uncertainty in Peru, has led to the decline of the community in recent years.

The most serious scandal involves the loss of more than $40 million by 100 to 200 Jews who had invested their life savings in the Panama-based offshore holding company of Banco Nuevo Mundo (BNM). The six Jewish directors of BNM sold millions of dollars in promissory notes to Jews and various Jewish organizations — including a retirement home — advertising annual interest rates of 10% or higher. Yet these notes became worthless when the Peruvian government, investigating allegations of impropriety, closed BNM.

"It was a big blow for the community," said Herman Blank, vice-president of Unión Israelita del Peru, an Ashkenazi congregation which represents around 50% of Peru's Jews. "Some people say they were completely wiped out, that they lost all their savings. We are really worried about what's happened, and we hope that some money can be recovered."

Rabbi Guillermo Bronstein of Sociedad Israelita de 1870 said BNM's directors were warned three times by Peru's superintendent of banking that it needed to increase its capital.

"The bank was closed in December 2000," Bronstein told JTA. "Since then, not one cent has been reimbursed to the investors, [even though] the bank's shareholders have paid hundreds of thousands of dollars to their lawyers."

In June 2001, said Bronstein, he and two other Lima rabbis issued a psak din, or decree, that excommunicates all six directors for failing to accept responsibility and return the money.

"According to Torah law and halacha, the shareholders were responsible, and must give back their savings to those who lost money," he said. "We also established that, as the shareholders did not do their part, they were not to participate in any ceremony or minyan. Should any of them die, they can be buried in the Jewish cemetery, but in a separate section. This punishment does not apply to their relatives, of course."

Meanwhile, Fujimori, who fled the country amid allegations of corruption, lives in exile in Japan, while Goldenberg is being investigated for various crimes, including the alleged mismanagement of $140 million in government funds. In an unrelated scandal, former TV station owners Samuel and Mendel Winter are in prison awaiting trial, while Alex Wolfenson and his older brother Moisés are under house arrest, charged with stealing state money.

The current president, Alejandro Toledo, is among the most unpopular heads of state in Latin America, though he's struggling to reduce poverty and clean up corruption in his administration. In the midst of all this chaos, Peru's Jewish population — which in the 1970s numbered 6,000 — continues to shrink.

"The community grows smaller every day because of the economic and political situation," says Eric G. Topf, a prominent Lima architect and past-president of B'nai B'rith Peru, which has 80 members, most of them elderly. "People don't encourage their sons and daughters who were sent to college in the U.S. and Israel to come back."

Jews have lived in Peru since the earliest days of the Spanish Inquisition, though in modern times, the first Jewish wave of immigration peaked around 1875. Following a war between Chile and Peru (1879 to 1883) that devastated the Peruvian economy, Jews fled to other countries and the community nearly disappeared.

The second wave of emigration began in the 1920s, when Jews from Europe and North Africa came for economic opportunity. That lasted until the onset of the Holocaust, when immigration was closed to Jews.

Except for the former finance minister, Jews have generally stayed out of politics, although Peru does have many prominent Jewish businessmen, including Isaac Galsky, owner of Sindicato Pesquero S.A., a fishmeal processing plant, and Jacques Levy, the former head of BNM and current owner of Lima's five-star Hotel Los Delfines.

Of Peru's 3,000 Jews, says Topf, "2,999 of them live in Lima," where the Unión Israelita del Peru has approximately 500 member families. Most of the remaining Jews are split between the Sociedad de Beneficiencia Israelita Sefaradí and the Sociedad Israelita de 1870, with about 200 families each.

In addition, Lima has a small Bet Habad in Lima. Lately, the Lubavitchers have begun sending matzohs and other kosher food from New York, and organizing annual seders in Cuzco, the ancient Inca capital that has become a magnet for Israeli backpackers hiking the Inca Trail and visiting the "lost city" of Machu Picchu.

There are also two tiny groups outside Lima that have strong ties to Judaism. One group, the B'nai Moshe, consists of former Christians with no knowledge of Jewish customs. Several hundred of these so-called "Inca Jews" have made aliyah, most of them settling in the West Bank religious community of Elon Moreh. The second group comprises about 170 descendants of Moroccan Jewish immigrants who live in the Amazon jungle port of Iquitos, and are now seeking recognition by Lima's Jewish establishment.

Because of economic difficulties, said Blank, Jewish institutions have been forced to cut back on various services that the community once took for granted.

"The Jewish community has reduced its services, independent of what happened with the BNM," said Blank. "The Colegio León Pinelo, one of the best educational institutions in the country, had more than 1,200 students; it's now around 500. La Hebráica, one of Peru's best sports and social clubs, is practically empty. Every day, the number of people who contribute money is less, but our expenses remain the same."

And despite all the scandals that continue to put the Jewish community in a negative light, Blank said he's seen no real increase in anti-Semitism among average Peruvians.

"It's true that some newspapers and TV stations have identified the people involved as Jews. They don't say they're Catholic when others are involved," he explained. "But I wouldn't say the scandals generated more anti-Semitism than before. Jews are emigrating to the United States or Israel because of the political and economic situation here. It doesn't have anything to do with anti-Semitism."

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