Rabbi Yosef Yitzchok Schneersohn
Chabad portrays Rebbe Yosef Yitzchok Schneersohn's (hereafter, the Rayatz) decision to remain in Russia as follows:
He was the only Jewish leader who chose to remain in Russia following the communist revolution, and built a network of underground yeshivot and a Jewish support system that functioned clandestinely through all the years of communism.
At grave risk to himself and to his Chasidim, Rabbi Schneersohn thus kept the moribund embers of Jewish life alive. In 1927, he was arrested in his home in Leningrad, on accusations of counter-revolutionary activities. He was sentenced to three years in exile and sent to the isolated townlet of Kostroma in central Russia.
But is this the truth? Not exactly.
The Rayatz stayed in Russia because he believed communism was not going to last. Any danger to himself would be temporary. He also urged his hasidim to stay in Russia. Why? Russia would soon be safe for Jews again.
He was wrong. Russia would not be safe for Jews until the dawn of the 21st century.
But the Rayatz did build an underground network of yeshivot and a Jewish support system?
He did. But that network was largely funded by money from the American Jewish Joint Distribution Committee. The Joint funded Jewish schools, synagogues and institutions in Russia through the organization of Russian Jewish communities. The Rayatz became head of the organization by default. By 1925 virtually all of Russia's senior rabbis had chosen to leave, correctly perceiving that there was no future for Jews in Russia, leaving the Rayatz – who disagreed with them – behind.
The Rayatz took the communal money sent by the Joint and distributed it. But unlike his predecessors, the Rayatz funded (almost) exclusively Lubavitch rabbis and institutions. If he wanted to set up a school in a shtetl, and even if that shtetl already had a non-Lubavitch rabbi cladestinely teaching there, the Rayatz would still send money only to Lubavitchers. This allowed Chabad to dominate the Russian Jewish community as it forced more and more non-Lubavitchers out of Russia.
The Rayatz's handling of these foreign monies violated the conditions for the money set by the Joint and other funders. They wanted all efforts, even non-Lubavitch efforts, funded – just as they had been before the Rayatz took over the organization. But the Rayatz defied the Joint and continued to direct the funds to Lubavitch projects at the expense of other worthwhile efforts. By 1927, the Joint had decided to act, and was preparing to cut off funds to the Rayatz and publicly accuse him of misuse of the money.
It was at this point, just before the Joint was about to act, that the Rayatz was arrested by the Soviets and charged with treason.
As the struggle to free the Rayatz commenced, the Joint did not withhold funds or accuse the Rayatz publicly. Instead, it kept the misuse of funds private in order not to give the Soviets more ammunition to use against him. And it tried to have the Rayatz freed.
When Chabad's(1) efforts in America resulted in the Rayatz's release, the resulting publicity and the Rayatz's new hero status made the Joint leery of confrontation. Shortly after his release, the Rayatz fled Russia, leaving behind hundreds of hasidim he had promised never to leave.(2) The issue of the misappropriated funds became moot and was never acted on by the Joint.
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(1) These were not necessarily Lubavitch hasidim. There were several Chabad rebbes at that time and shortly before it, including the Bobroisker Rebbe. It was hasidim of these rebbes who worked along side Lubavitchers to free the Rayatz.
(2) He would repeat this just before the start of WW2, telling his followers during that summer there would not be a war and that Poland was safe. When September 1st proved him wrong, the Rayatz fled, leaving hundreds of his followers – including American yeshiva students – to fend for themselves. Many were killed by the Nazis. As Bryan Mark Rigg has shown, the Rayatz tried very hard to save his library and his silver goods – much harder than he tried to save his followers.