By Ruth Ellen Gruber · January 10, 2012

BUDAPEST (JTA) — A whistle-blowing rabbi and a reform-minded lay leader are at the forefront of new efforts to shake up Hungary’s entrenched Jewish establishment.

Late last year Rabbi Zoltan Radnoti alerted authorities to complaints of embezzlement and tax fraud in the operation of Budapest’s main Jewish cemetery on Kozma Street. This led to a police investigation and an unprecedented raid in December on both the cemetery and the Jewish community offices that house the burial society, as well as a public airing of the scandal in the mainstream media.

“Many people in the Jewish community administration attacked me for airing internal affairs to the outside,” Radnoti, 40, told JTA. “I was told that I draw a salary from the Budapest Jewish Community, so I was disloyal to my employers.”

But, he added, “You have to fight for the truth no matter what. I think this could become the beginning of the cleaning-up of Jewish communal affairs.”

Joining Radnoti is Andras Heisler, a former president of the Federation of Jewish Communities in Hungary, or Mazsihisz, the official umbrella of the Neolog community, a moderate reformist movement to which the vast majority of affiliated Hungarian Jews belong. The Budapest Jewish community, home to 90 percent of the country’s Jews, is the largest member of Mazsihisz.

Mazsihisz officially represents the interests of Hungarian Jewry to the government and is responsible for the annual distribution of millions of dollars of government grants and Holocaust compensation funds to Jewish organizations. Critics have long called for a reform of its financial and administrative operations, accusing the organization of being undemocratic, unrepresentative, monopolistic and opaque.

Managing director Gusztav Zoltai, 76, has been in office for two decades and has come under particularly sharp criticism for his leadership style and firm grip on power.

“Zoltai manages to hold on to power by switching people in key positions who are somehow dependent on him,” Janos Gado, an editor at the Jewish magazine Szombat, told JTA. Gado and others say that many, if not most, of those who elect communal leaders are financially dependent on Zoltai.

Zoltai, who along with current Mazsihisz President Peter Feldmajer declined to be interviewed, was elected managing director in 1991, when the organization was first established to replace the communist-era Jewish body. A child survivor of the Holocaust who lost most of his family in World War II, he had worked previously as the state manager of a theater.

Last spring, in a case reported in the Hungarian media, Radnoti and Heisler charged that the election of Jewish community officials had been manipulated to prevent changes in the top leadership — and specifically to prevent Heisler from becoming a delegate to the general assembly, the body that elects the top officials, including Zoltai.

Heisler had resigned as Mazsihisz president in 2005 following his attempts to overhaul the organization were thwarted and his calls for Zoltai’s resignation were rebuffed. But in December, with Radnoti’s support, he was elected to the Mazsihisz board, and now he is confident that given the adverse publicity of the police investigation, he can make a renewed push for reform.

“If Mazsihisz survives, it will survive in a different form,” Heisler said. “The way it operates now, it can’t continue. Zoltai must go; if he leaves there is a chance.”

Mazsihisz has come under particular criticism for a lack of financial transparency — criticism that has taken on renewed relevance following the police raid. The raid was sparked by material furnished by Radnoti that documents transactions without receipts, double-entry bookkeeping, sales of nonexistent grave sites and other abuses.

“It’s the tip of an iceberg,” said Gabor Miklosi, an investigative journalist who broke the story in a long article on the popular Index.hu website.

After the allegations surfaced, Mazsihisz issued a statement saying that in its own internal investigation. the Budapest Jewish community had uncovered one case of abuse several months earlier that had involved a false receipt. The director of the cemetery was fired after repaying the money, the federation said.

“The irregularities that were committed did not involve the invoicing system of the funerary department” of the burial society, said the statement.

Sociologist Andras Kovacs, who co-authored a report last year that called for “urgent” reform of Mazsihisz, said the manner in which communal funds are distributed is “a totally dark area.” The report, issued in September by the London-based Institute for Jewish Policy Research, called for structural changes to ensure greater transparency and equitable distribution.

“There are a lot of rumors and gossip,” Kovacs told JTA. “Some former officials of the community suggested several times to launch an independent audit, but it never happened. It is always suggested that to raise questions about this could aid anti-Semites by putting the community in a bad light.”

In recent months, the government has been conducting negotiations that could lead to the withdrawal of some funding from Mazsihisz.

Under a new law, the state recognizes three official streams of Judaism corresponding to the three that existed prior to the Holocaust: Neolog, represented by Mazsihisz; Orthodoxy, whose presence in Hungary is tiny; and the so-called “Status Quo,” now known as the Unified Hungarian Israelite Community, or EMIH. Of the three, only Mazsihisz can receive direct government subsidies and collective compensation for unclaimed Jewish assets seized by the communists.

Several Jewish groups are now pressing to obtain direct government funding rather than be obliged to obtain funding doled out by Mazsihisz, which says it will fight any such reallocation.

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