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A bitter controversy has erupted at Canada's oldest synagogue, after the de facto ouster of its chief rabbi.

Supporters of Rabbi John Moscowitz, of Toronto's Holy Blossom Temple, are incensed at a recently negotiated deal that will see him step down next month.

Under the accord, Rabbi Moscowitz, 60, will take an unusual, fully paid, three-year sabbatical, effective July 1, although he will return to officiate at High Holiday services this fall.

Official retirement would commence in 2015, but he will continue on staff as rabbi emeritus at an undisclosed salary.

The settlement, said to be worth more than a million dollars, was hammered out in protracted legal negotiations.

"This fight has been going on for a long time and I think John just got tired of fighting," says Israeli writer and political commentator Yossi Klein Halevi, one of Rabbi Moscowitz's closest friends.

Many congregants say they are outraged by the decision – and by how the synagogue's board of directors has handled the issue.

They took particular umbrage to the terse, one-paragraph letter, signed by board chairman Mark Anshan, that announced the sabbatical. After a stream of protests, Mr. Anshan sent out a second letter to congregants, extolling the rabbi's leadership and quarter-century of service to the community.

Several members have recently announced plans to leave, including long-time members Senator Linda Frum and her husband, real-estate developer Howard Sokolowski.

"This has been a tremendous act of board mismanagement," said Ms. Frum. "I am so upset about the way he has been treated. I feel so poisoned by the atmosphere created that it's not a place that I could continue to feel comfortable. I know others who are leaving and others who are considering it."

Bound by confidentiality commitments, neither Mr. Moscowitz nor members of the temple's board would speak publicly, but it is clear that his departure culminates a long and acrimonious backstage battle that divided the congregation.

Founded in 1856, Holy Blossom – with some 7,000 families – is one of Canada's most influential synagogues. A series of distinguished rabbis have led the Reform institution, including the late Abraham Feinberg, the late Gunther Plaut (he died this past February), and Dov Marmur (now rabbi emeritus), whom Mr. Moscowitz succeeded in 2000, after 13 years as an associate rabbi.

In addition to Ms. Frum, the synagogue's membership includes Senator Irving Gerstein, Liberal Party leader Bob Rae, federal cabinet minister Joe Oliver, former Canadian ambassador to Washington Alan Gotlieb, and some of the city's most prominent and powerful business executives – Onex founder and chairman Gerry Schwartz, and his wife, Indigo CEO Heather Reisman; investor and cultural philanthropist Joseph Rotman; and former National Bank co-chairman Lawrence Bloomberg.

The synagogue has enjoyed a long tradition of social activism. In the 1960s, it championed the cause of civil rights in the United States. In the 1970s and '80s, it helped spearhead the campaign for the right of Soviet Jews to emigrate. In the 1990s, it became a major player in the city-wide Out of the Cold program for the homeless and the indigent.

There is no clear consensus on what served as the tipping point in the Moscowitz affair. Insiders say the anti-Moscowitz camp – led by a cadre of old-guard board members – has been plotting to remove him for years.

In 2005, at his first contract-renewal talks, one group fought to block his reappointment.

In 2007, the rabbi became the focal point of a vicious fight over a proposed $35-to-$50-million synagogue renovation. Mr. Moscowitz endorsed Toronto architect Jack Diamond's proposal to shift the main sanctuary's orientation, so that prayer-goers would face east, toward Jerusalem – as they do in most synagogues. At Holy Blossom, they presently face west.

"The old guard won that battle," concedes Ms. Frum, "and the result is, the place is falling down around its ankles. They won by saying we'd rather it stayed in its tatty condition than that Jews face Jerusalem."

Five years later, the restoration has yet to begin – and resentment lingers.

Some observers say Mr. Moscowitz was out-of-step with the liberal traditions of the synagogue – most noticeably, perhaps, in his increasingly right-wing tilt on issues involving the Middle East.

"I think what happened is that [board chair]Mark Anshan managed to galvanize the opposition to John, based on his political conservatism and religious traditionalism," says Mr. Klein Halevi. "Holy Blossom was classical Reform and John offended those sensibilities. He broke the mould by understanding the implications of the collapse of the Oslo Accords and by bringing in more Hebrew and greater respect for Halakha [Jewish law] This was very painful for the old guard."

Mr. Klein Halevi says he regards "John's treatment as a disgrace for the synagogue and the Jewish community. We don't have too many rabbis of John's calibre. This is the worst kind of synagogue story I've ever encountered. I'm embarrassed as a Jew."

Some view the conflict through a different prism. "The temple had to decide what kind of rabbi it wanted," says one long-time member. "An intellectual giant like Gunther Plaut or an effective managing director? Moscowitz was a good managing director – he got into infrastructure, financing, the development of the shul, but he was not at the same level, intellectually."

"I want to see the institution heal," says another long-time member. "But this congregation has been led by major figures, internationally. You have to ask – and this is cruel – but is John Moscowitz of that timbre? Is there a body of writing, a stature, a gravitas, consistent with that tradition? I think the answer is not."

Richard Rotman, a former board member, disputes that analysis. "John has been unfairly maligned in lots of ways. He's a phenomenal teacher with incredible intellectual depth. People have been coming faithfully to his Saturday Torah class for years."

Other critics fault his schmooze quotient. "John is a brilliant in the head guy," agrees another Toronto rabbi. "And he's fine, one on one. But he's entirely unsuited to human interaction – connecting with people."

A source close to the situation said Mr. Moscowitz's tenure had become "a fiefdom," which had to be broken.

Mr. Rotman also decried the board's handling of the affair. "The whole process was undertaken under such conditions of secrecy. There was very little public airing or effort made to explain 'change management.' They've done the worst job of this."

Others praise Mr. Moscowitz's work as a grief counsellor. "When my mother passed away," says Joe Oliver, "when my brother was hurt, John was there for us. I know he's been criticized for catering to the rich and powerful. But I can tell you he was there long before I was a cabinet minister. And he has been there even for people in distress who weren't members of his congregation."

But in recent years, says one congregant, Holy Blossom "has been losing younger members mightily. I think that was a factor."

Meanwhile, at week's end, some of the rabbi's wealthier backers were said to be considering cancelling financial support for the proposed renovation – a development likely to add to the toxic air swirling around Holy Blossom.

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