The president and founder of Chabad of California Inc. testified Friday that a billionaire philanthropist made a verbal promise to him in 2004 to donate at least $18 million for the construction of a family center in the donor's name.
Rabbi Boruch Shlomo Cunin said he initially asked Roland Arnall -- who made his fortune by helping to create Orange County-based Ameriquest Mortgage in 1979 -- for $40 million to help fund a center that would provide an education and dormitories for youths as well as services for for Holocaust survivors.
Arnall, cautious because of his business problems involving Ameriquest and the subprime market, then made a commitment, Cunin said.
He said Arnall told him, "I promise to you no less than $18 million. You know I have problems both personal and in business, I can't tell you when you'll be able to get it, but I will pay it."
Arnall died in March 2008. His widow, Dawn Arnall, claims that since there's no written documentation of Chabad's claim, she is under no obligation to turn over the money as demanded in a lawsuit the organization filed against her and her husband's estate last Oct. 1.
The non-jury trial before Los Angeles Superior Court Judge Mary Ann Murphy has pitted the testimony of the Chabad president against the wealthy widow, who served as co-chair of the 2004 Republican National Convention.
Chabad provides educational and social services under Jewish auspices.
Asked by Chabad attorney Marshall B. Grossman whether he believed Arnall when he made the $18 million promise without putting it in writing, Cunin replied, "I had no doubt whatsoever. Roland's word was good."
Cunin said he did not tell Chabad's board of directors about the Arnall pledge because its members are residents of the community and major contributors do not necessarily like their donations being made public.
Cunin said that had Arnall not made the commitment, Chabad would not have kept the property on Pico Boulevard on which the Arnall Family Center was to be built.
"It would have been sold," said Cunin. "Chabad needed the money."
Even before making his pledge, Arnall urged Chabad not to sell the land, said Cunin.
Roland Arnall, who was ambassador to the Netherlands under President George W. Bush from March 2006 to March 2008, was known for giving money to his favorite causes, particularly Chabad, over more than three decades. He contributed more than $4.4 million during that time to the rganization for its operational and capital expenses, said Cunin.
Cunin also said Arnall offered to ask President George W. Bush to help Chabad recover a sacred collection of religious books and manuscripts taken and hidden by the Nazis during the Holocaust.
But when he died two years ago of cancer at age 68, soon after leaving his ambassador's post, the one-time billionaire's assets were diminished by the collapse of the subprime mortgage industry.
Westwood-based Chabad of California's suit against Dawn Arnall seeks $17.5 million, which the organization claims is the balance due on the $18 million pledge after three payments of $180,000 were previously made.
Cunin said Chabad spent more than $200,000 in preliminary engineering costs for the center and that it became increasingly urgent that Arnall pay the full pledge. But he said that after each $180,000 installment was made, Arnall told him, "You know I am having problems, be patient."
In February 2008, Arnall made his second and final promise to Cunin to complete his pledge while he, his son, Daniel Arnall, and the rabbi were headed to the airport to board a jet bound for the Netherlands, according to Chabad's court papers. But Arnall died the next month and the balance was never paid to Chabad.
The rabbi said he did not know at the time that Arnall's health was deteriorating. He also said Dawn Arnall did not tell him about the extent of his illness until the night before her husband's death, when the rabbi was out of town.
Cunin said he does not attend funerals and Arnall's case was no exception.
"It's a spiritual decision that one has to make at a certain point in one's life," testified Cunin.
