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Couple's success spreading kabbalah yields to discord, tax probe

Religion and BeliefInternal Revenue ServicePersonal Service

Philip and KarenBerg, founders of the L.A.-based Kabbalah Centre, set out to make secretJewish mysticism available to the public. But former followers are nowcritics, and the IRS is investigating.

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This building on Robertson Boulevard near the heart of Los Angeles' orthodox Jewish community is the headquarters of the Kabbalah Centre's empire. (Kirk McKoy/Los Angeles Times)

October 16,2011

First of twoparts

Philip Berg’s new wife wasyoung, beautiful and worldly, everything that he, a middle-aged orthodoxrabbi, wasn’t. Karen Berg could be pushy too. She brought a televisioninto their home over his objections. She tossed out his traditionalblack fur hat, and pressured him to teach ancient Jewish mysticism --known as kabbalah -- to the public.

“Men and women together?”Philip said.

“Yeah, sure, men and women,” shereplied.

MYSTICISM ANDMONEY


The heightened profile of the L.A.-based Kabbalah Centre came with a continued emphasis on soliciting donations, sometimes in ways some found offensive. Then the IRS stepped in.


Part two: Celebrities, secrets and kabbalah


Kabbalah finances: Where the money comes from


Statement from Philip and Karen Berg

Philip understood how radical herproposition was. For centuries, elite rabbinical scholars -- all of themmen -- had guarded like rare gems the spiritual secrets believed to beencoded in the Torah. Karen was an outsider to this culture.Entrepreneurial and unimpressed by religious authority, she saw noreason why such valuable teachings shouldn’t be offered on the openmarket.

“Let’s give it to the people,” she insisted.

Philipwas torn between tradition and his soul mate. He chose Karen.

Thatconversation four decades ago, recounted by Karen in videos and in abook she wrote, set the course for their lives. Once so poor that theyshopped at thrift stores, slept in cramped rooms above a Queenssynagogue and studied scripture on a pingpong table, the Bergs graduallyturned their spiritual vision into the Kabbalah Centre, a worldwideorganization with headquarters in Los Angeles, branches in dozens ofcountries and assets estimated to be in the hundreds of millions ofdollars.

The center’s teachings about God, happiness and themeaning of life drew a passionate following that included big names infilm, fashion and music. Devotees treated the couple as if they weregods. Some considered it an honor to eat Philip’s table scraps. Theyaddressed Karen in the third person and showered the couple with gifts,including couture handbags and spa vacations. The Bergs stayed in luxuryhotels, traveled by private jet and took gambling trips to Las Vegas,according to former members of their inner circle.

The KabbalahCentre prospered, but eventually its success proved divisive, andharmony gave way to public discord. The Bergs’ lifestyle was questioned,their finances scrutinized. Friends became enemies, supporters fellsilent. In recent months, IRS agents investigating the center’s financespored over records and questioned the Bergs’ followers.

Philip hadalways sensed that Karen’s idea of kabbalah for the people would stirvehement opposition. “We’re probably going to get killed,” he warned herduring that conversation 40 years ago. “We’re probably going to getstoned.”

A devout religious upbringing

Philip Berg, flanked by sons Michael, left, andYehuda, blows the traditional ram’s horn at Rosh Hashana, orJewish New Year, rites for kabbalah students. (Theo Wargo / WireImage)

Philip Berg was born Shraga Feivel Grubergerin Brooklyn, two months before the stock market crash of1929. His family was devoutly religious. Their neighborhood,Williamsburg, filled with Hasidic Jews fleeing Europe. A thorough Toraheducation was a given and Philip began his at age 3. He attendedultra-Orthodox yeshivas and was ordained a rabbi in 1951.

As ayoung man, he turned away from full-time religious studies. He laterwrote that he had become “profoundly disillusioned by my religion as ithad been taught to me,” but he also needed to support his wife, Rivkah,and their young family. The couple would eventually have eight children.He Americanized his name and became a salesman for New York LifeInsurance Co., a position family friend Billy Phillips said afforded hima chauffeured Cadillac and good cigars. In the early ‘60s, Philip went toIsrael, where he was introduced to kabbalah by his wife’s uncle, arenowned scholar named Yehuda Brandwein. Kabbalah entranced Philip.Unlike yeshiva, often dominated by debates about the minutiae of Jewishlaw, kabbalah focused on life’s existential questions: Why am I here?How can I be happy?

Brandwein, who ran a Jerusalem yeshiva, wasPhilip’s spiritual guide to the mystical world that would become hislifelong devotion.

The Hebrew word for “received,” kabbalah holdsthat the first five books of the Bible contain hidden lessons.Kabbalists believe God revealed this wisdom to Moses along with the TenCommandments. That knowledge, they believe, was passed down orally untilthe 13th century, when it was published in a series of books known asthe Zohar.

Some Jewish scholars regarded with suspicion kabbalah’spreoccupation with astrology, reincarnation and a world of unseenforces. Others, including Philip, saw it as Judaism at itspurest.

Returning to Brooklyn, he opened his insurance office atnight to orthodox Jews for the study of the Zohar. In 1965, with thehelp of another student and an elderly, impoverished scholar, LeviKrakovsky, Philip set up the National Institute for Research inKabbalah, a forerunner of the Kabbalah Centre.

In a tiny apartmentso crammed with books that he could have only one visitor at a time,Krakovsky translated the Zohar and other texts into English. He yearnedto spread the teachings, but like other scholars before him, he wasconfounded by an inherent contradiction in kabbalah: It taught that theMessiah would appear only when the world embraced its wisdom. Yet onlyJewish men, 40 or older and with an encyclopedic knowledge of the Torahand Jewish customs, were permitted to study it.

Krakovksy luggedhis handwritten manuscripts around Brooklyn in a suitcase, searching foran audience. He died in 1966, never having found a publisher. Yearslater, his heirs claimed that Philip had stolen some of his manuscripts.They sued, accusing Philip of publishing the translations under his ownname to make money and “to falsely enhance [his] stature ... as a greatKabbalah teacher.”

Philip denied the allegations.

The case went totrial in Manhattan federal court, but just as the jury was to begindeliberations, the center reached a confidential settlement withKrakovsky’s family.

Whether or not he stole Krakovsky’s work,Philip inherited his desire to expand kabbalah’s reach. That ambitionmight have remained unrealized had he not hired a gum-smacking16-year-old named Kathy Mulnick as a receptionist.

Oft-told taleof couple’s meeting

Philip andKaren Berg are seen here at a 2009 event in Israel sponsored by theirLos Angeles-based Kabbalah Centre, which the IRS is investigating.(Photo by Shai Halamish)

The Bergs’ romance isthe Kabbalah Centre’s creation story, and the family has told and retoldit in books, videos, religious services and media interviews. Verifyingit has proved difficult. Many of those involved, including Philip’sfirst wife, are dead. The Bergs declined to talk to TheTimes.

Raised by a single mother in postwar Brooklyn, KathyMulnick was a self-described wild child who could take care of herself.She attended 13 different schools, and would later tell friends shecouldn’t read until she was 9. Later in life, after she changed her nameto Karen, she regaled friends with stories of the toughness bred by herchaotic youth.

Her family was Jewish, Karen has said. But theywere assimilated and ignorant of even the most sacred parts of thereligion. In a 2009 interview with the Jerusalem Post, she recalled afamily tradition of enjoying a big meal on YomKippur, the day of fasting and atonement. Her job at Philip’sinsurance office exposed her to the world of religious Jews who observedthe Sabbath and kept kosher.

She has written that as a high schoolstudent, she had nothing in common with her boss, a 31-year-old with awife and children. “In fact, I disliked the man,” she wrote in “GodWears Lipstick,” a 2005 book subtitled “Kabbalah for Women. ”

After sixmonths, she quit.

At 17, she married a man from her neighborhood. Theyhad two daughters, built a contracting business and eventually divorced.After they separated, she decided to call an old friend in Philip’soffice. At the end of the conversation, she asked the woman to say helloto Philip for her. It had been eight years since she had seenhim.

“Not 10 minutes later, my phone rang,” she wrote.

Itwas Philip. They chatted and their conversation turned to his devotionto kabbalah. Karen was intrigued because of her interest inNewAge philosophy and asked if he would give her privatelessons. By her account, Philip, who wouldn’t even shake hands with awoman who wasn’t his wife, nonchalantly replied, “Okay, whynot?”

“We made a date for dinner that night to discuss thedetails,” she wrote later. “I have to tell you at that meeting, it wasall over. We knew instantly that we were meant for eachother.”

Philip’s marriage to his first wife fell apart, and he andKaren were married in 1971. Their early relationship was a tug of warbetween her worldliness and his piety. Philip threw out his new wife’slibrary of New Age books and blocked the door when she tried to bring atelevision into their home. He gave in when she threatened to leave him,Karen wrote.

Then there was the hat.

“One day I took thatbig black fur hat off his head and threw it right out the window. I saidto him, ‘Let’s understand something. I joined your world so you’ve gotto come to mine. I can't live with this kind of strictness,’” shewrote.

Philip gave up the insurance business and the couple movedto Israel shortly after they were married. They lived in a tinyapartment in Jerusalem with their sons, Yehuda born in 1972 and Michaelin 1973, and drove a beat-up Fiat, recalled Jeremy Langford, an earlydisciple who lived with the Bergs in Israel for two years.

Karenbegan to study kabbalah seriously. They argued over what to do with

Philip’s spiritual knowledge. She suggested teaching kabbalah toanyone who wanted to learn about it, including women and those withoutyeshiva training. Philip acquiesced, and in so doing elevated Karen to astatus well above a rabbi’s wife. In the eyes of followers, Karen becamePhilip’s peer: He had the education, she had thenerve.

In the eyes of followers, Karen became Philip’s peer: He had the education, she had the nerve.

“What Karen Berghas done is what no man in history has done,” said Phillips, the familyfriend. “Never have the words ‘kabbalah’ and ‘Zohar’ been known outsidethe small circle of kabbalists.”

The Bergs advertised introductoryclasses; the cost was about “the price of a falafel,” one former memberrecalled. The New Age seekers, retirees and others drawn to the coursesin Tel Aviv were from secular homes and knew little about their Jewishheritage.

“We loved that we found mysticism in our own backyard,in Judaism. The teacher spoke of things that very much resonated withus.... There was no pressure to be observant,” said one longtime memberwho became disillusioned and left the center after two decades. Theformer member, who continues to practice kabbalah’s philosophy ofhelping others, asked not to be named because relatives are stillinvolved.

Philip held himself out as the spiritual successor toBrandwein and used the name of a kabbalah yeshiva founded in Jerusalemin 1922. But Brandwein’s heirs, who were running the yeshiva at thetime, publicly disavowed any connection to Berg.

Philip had fewerthan two dozen regular students in 1977 when Langford enrolled. Langfordsaid he was captivated by the rabbi’s teachings: “Everything we did feltso important. The future of spirituality was dependent on us.”

The Bergs spoke constantly of expanding and in publishedmaterials sometimes exaggerated the size of the organization, he said.“There was a joke that anywhere he had sneezed he would say there was abranch there,” Langford said.

In the classroom, Philip, known asthe rav, or rabbi, was beloved for his clear explanations of loftyconcepts such as shame and mercy. At home, his conversations with Karenoften concerned less spiritual topics.

“She was always talkingabout money and the need to have it,” Langford said. Karen wanted a bighouse and her husband agreed, saying it could attract new students, hesaid.

“He could see in her no evil. He could see in her no wrong,”recalled Langford, who was the first student promoted to teacher. He isnow a glass artist in Israel and said he still studieskabbalah.

In the early 1980s, the Bergs returned to theU.S.

“He came to me and said that if he wants to make it big time,it can’t be done in Israel,” Langford said.

A family affair

Flanked by their sons, Yehuda, left, and Michael on theright, Philip and Karen Berg participate at a 2009 kabbalah event. (Photo by Shai Halamish)

The Bergs settled in Richmond Hill, amiddle-class Queens neighborhood. Karen finally had the big house shewanted, but its stately exterior belied a modest existence. They hadmoved back from Israel without enough money for a car, according toformer student Dorothy Clark. She and another former student recalledthat Karen dressed their sons in secondhand clothing.

The housedoubled as the American headquarters of what would soon be known as theKabbalah Centre. The basement served as a dining hall and the livingroom as a synagogue. Classes were held around a pingpong table, one ofthe Bergs’ few pieces of furniture, recalled Michel Obadia, a Manhattanhair salon owner who studied at the center.

As in Israel, thestudents were mostly alienated Jews who liked Philip’s combination ofapproachability and orthodox background. He would teach that theoft-told stories of Adam, Abraham and other Torah figures containedhidden wisdom about how the universe worked. Over two hours, Obadiarecalled, Philip would discuss what the Zohar taught about a particularesoteric topic -- how to find the middle ground between judgment andgrace, for example.

Obadia said students would speak up about howthe abstract principle applied to their own lives.

“He had thelanguage, the formulas, for you to pierce through and all of a suddenstart to understand things,” said Obadia, who left the center more than20 years ago but can still recite many of Philip’s teachings.

Hesaid that at the close of class, many students would strap onphylacteries -- small boxes that contain Torah passages -- and praytogether.

Their congregation was growing, but the Bergs were determined to reach even more people.

Their congregationwas growing, but the Bergs were determined to reach even more people.They turned to publishing. In Israel, they had discovered that studentswanted their own kabbalah texts and would pay for them. This was arevelation to Philip, who was used to impoverished yeshiva scholarshunkered over communal books, as he later recalled in testimony in acivil lawsuit.

The books sold in Israel were dense and difficult,and written in Hebrew. Berg turned to Clark’s husband for help in makingthe teachings more accessible. Kenneth Clark was a ChicagoTribune reporter covering entertainment in New York. The two mengot together every Wednesday night at the Bergs’ dining roomtable.

“His idea was to get this into common language that anybodycould understand,” Kenneth Clark recalled in court testimony yearslater.

Philip would explain a portion of kabbalah to Clark, whohad been raised a Southern Baptist and knew no Hebrew. Clark would lookfor ways to make the ancient teachings relevant. When Philip describedkabbalah’s conception of the age-old conflict between good and evil,Clark suggested comparing it to the "StarWars" movies.

Books he wrote with Clark and otherghostwriters allowed Philip to reach beyond Queens and Israel, and theBergs soon had branches in cities with large Jewish communities,including Miami, Toronto and Paris.

They also established areligious order called the chevre , “friends” in Hebrew. Thechevre , primarily young Israelis, took vows of poverty and liveddormitory-style in a house near the Bergs’ Queens home and later incities around the world. By day, they knocked on doors in Jewishbusiness districts, carrying Zohars and delivering a pitch about thecenter to raise funds. At night, they roamed Jewishneighborhoods.

“We would say, ‘We are teaching Jewishspirituality.’ Most people would say, ‘I'm not interested.’ Some wouldsay, ‘What's it about?’” recalled Shaul Youdkevitch, a high-rankingteacher who had a falling-out with Karen in 2008 after three decades asa chevre .

The chevre tried to persuade people tomake a donation or buy a Zohar for $360, according to Youdkevitch andother former members of the order. Many of the people they solicited didnot read Hebrew, but the chevre assured them that wasn’t aproblem: Just passing a hand over the Zohar’s letters can give spiritualinsight, and its physical presence provides protection from harm. (Thetalismanic powers of the Zohar remain a central tenet of Kabbalah Centreteachings.)

In the mid-‘80s, the center began emphasizingdonations as a way to ensure members’ well-being, spiritual andotherwise. Consistent with Jewish tradition, followers were urged togive generously beyond the expected tithe of 10% to 20% of theirincome.

Teachers departed from tradition in telling donors theirmoney should go only to the center: Spreading kabbalah was more vitalthan the work of homeless shelters and other charities. The centertaught that tithing protected donors against financial setbacks, andthat additional donations would stave off divine punishment in the formof illness, family strife and other problems.

Karen kept closetabs on fundraising, Youdkevitch and other former memberssaid.

“She was sitting on every chevre in the world:‘Where are you? How much money are you bringing in?’” he recalled herinquiring. “She would say you have to be outside all day.”

Philipfocused on spiritual matters. He prayed six to eight hours a day andcontinued to write books with Clark. In 1988, Philip published “Power ofAleph Beth.” The first sentence mentioned “Star Wars” directorGeorgeLucas and the cover featured a sci-fi design with Hebrewcharacters floating under a dark planet.

The book used modernworries such as nuclear war and drugabuse to give kabbalah teachings a contemporaryfeel.

There was also a nod to a world-famous pop star.

“Weare living in a material world and I’m a material girl,” began thesecond chapter. Nearly a decade before Madonna attended her firstkabbalah class, she served as what Clark called “a made-to-ordermetaphor for what kabbalah does not teach.”

Part two: Celebrities, secrets and kabbalah

Kabbalah finances: Where the money comes from


Philip and Karen Berg, founders of the KabbalahCentre, declined to be interviewed for this report and instead issuedthis statement:

“The Kabbalah Centre is a nonprofitorganization leading the way in making Kabbalah understandable andrelevant in everyday life. Our funds are used in the research anddevelopment of new methods to make Kabbalah accessible andunderstandable.

“The Kabbalah Centre hasreceived subpoenas from the government concerning tax-related issues.The Centre intends to work closely with the IRS and the government, andis in the process of providing responsive information to the subpoenas.

“The Centre is disappointed that the recent pressregarding the Centre and this investigation is being fueled by rumorsspread by a few disgruntled former students and former employees withpersonal agendas. The Centre is confident that the investigation willshow that the Centre has and continues to serve its mission and act infurtherance of the wisdom and teaching ofKabbalah.”

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