An independent inquiry into whether a senior Labour figure defrauded a Jewish charity out of more than £100,000 said trustees failed to exert “proper control”.

Last year, the Jewish Chronicle leaked a document, the 2013 Internal Report, which detailed Hertsmere Labour leader Cllr Jeremy Newmark’s alleged expenses claims while he was chief executive of the Jewish Leadership Council (JLC).

Cllr Newmark was not elected in Hertsmere at the time.

Examples of these alleged expense claims include family holidays and a £46,000 BMW car – which Cllr Newmark says was a company car and was on a monthly lease.

The inquiry, which was made up of a three-person panel of independent forensic accountants, found there is “potentially questionable expenditure of £111,734” which warrants further follow up.

This includes cash sums totalling £4,810 withdrawn from JLC’s accounts by Mr Newmark, amounts totalling £1,900 paid into his personal bank account, and amounts claimed on his personal credit card totalling £17,000.

Mr Newmark joined the JLC in 2006 before resigning in 2013 on grounds of ill-health – shortly after the allegations came to light.

In the private report, which has been made public by the JLC, investigators said they had been “seriously hampered” by a lack of documentary information.

The report stated the JLC showed “little evidence of acceptable levels of financial control”, allowing Mr Newmark to spend funds “without approval” and to pay money into his personal bank account “without anyone requesting written support documentation”.

The panel was made up of Dawn Freedman, a retired judge, Derek Zissman, a former vice chairman of the professional services group KPMG, and Michael Scott, a solicitor at Charles Russell Speechlys LLP.

Details not published in the report have been sent to the City of London Police for further investigation.

Cllr Newmark, who is a ward councillor in the Kenilworth ward of Borehamwood, leader of Hertsmere Labour and stood as parliamentary candidate in Finchley and Golders Green in 2017, says he will not be stepping down and he has been supported by his fellow councillors.

In a statement, Hertsmere Labour group whip Cllr Richard Butler said: “Cllr Newmark makes a significant contribution to this borough. He co-operated fully with the independent investigation process at all stages and kept us informed. Critically, none of the substantive allegations against Cllr Newmark was proven despite a year-long process.

“None of this has any relevance to Hertsmere Borough Council. Cllr Newmark has our full support.”

Cllr Newmark says it “speaks volumes” details of the report have been released as his party begin their election campaign. All seats are up for election in Hertsmere in May.

When approached by this newspaper last year, he described the allegations as a “politically motivated smear”.

In a statement last week, Cllr Newmark said: “As the former CEO, I accept the report’s criticism of some administrative processes and procedures.

“It is clear from the report that after spending a huge amount of time and money investigating the issues they have not been able to stand up the core allegations against me that were published last year.

“I had welcomed the opportunity to publish my responses on the JLC’s website; however, I am disappointed that they have refused to publish the bulk of my detailed response because they say it contains defamatory statements about third parties.

“I am also disappointed that JLC has refused to publish a section of this statement because they claim it contains information that could lead to the identification of the whistleblower.

“I will not hide behind criticisms of process. I am prepared to answer any further questions that the JLC, Charity Commission, police, or others may have.”

Hertsmere Borough Council leader Morris Bright has called on Cllr Newmark to step down.

He said: “All people who put themselves for public office must follow what are known as the Nolan principles. These include selflessness, integrity, accountability, and honesty. The fact that these serious allegations which have been reported to the police are said to have taken place five years ago doesn’t detract that these principles still apply.

“Cllr Newmark has a right to defend himself and his name but he must surely want to put the concerns of residents before his own. Borehamwood has one of the fastest growing Jewish populations in the country – some 2,000 residents - who remain alarmed by the pernicious and on-going displays of anti-Semitism within the Labour party.

“I would hope that Cllr Newmark has the selflessness and integrity to make a decision here which puts both residents in general and the large local Jewish community in particular, first in his thoughts.

“He should step back. Or the local election campaign will end up being about whether he is fit for office and that would not fair to anyone, least of all his own party.”

JLC chairman Jonathan Goldstein said: “The panel has concluded there were deficiencies in the organisation’s processes in 2012 and 2013. We accept the finding of the panel as well as the recommendations – all of which were are implementing in full or have already implemented.”

A spokesperson for the Charity Commission said: “We have received a copy of the final report of the independent review into the Jewish Leadership Council and are currently considering its findings.”

  • The full report can be viewed here
  • The JLC's and Jeremy Newmark's full statements can be read here