In response to the controversy and calls from concerned donors, the S.F.-based JFCS faxed a press release to local media distancing itself from JEC's fund-raising.

Anita Friedman, executive director of JFCS, said late last week that "99 percent" of their donated cars are given directly to the emigres. The agency asks permission from donors before selling any car for cash.

"We were always concerned… that the good work of organizations that are involved in nonprofit work would be somehow diminished by a bad apple," she said.

Meanwhile, the couple that runs JEC, Rabbi Bentziyon and Mattie Pil, are continuing with one of their projects — an East Coast trip with 12 boys from the Chernobyl area.

The boys, who are living in San Francisco for a year under JEC's care, met with first lady Hillary Rodham Clinton at the White House on Friday of last week to mark the 10th anniversary of the world's worst nuclear accident, which occurred near Kiev, Ukraine. They visited Florida this week, where they planned to visit Cape Canaveral and tour the space shuttle.

In a telephone interview from Washington, D.C., the rabbi defended his fund-raising and welcomed any official investigation.

"I don't have any problem because everything is straight," he said. "We're honest."

Since last week, other developments have occurred:

*The State Attorney General's Office said it has no plans to launch any investigation into JEC soon. Peter Shack, a deputy attorney general, said the state Charitable Trusts Section has been working with JEC on complying with financial filing requirements since 1994.

"If we ever find anything, we have the luxury of a 10-year statute of limitations," he said.

*The Internal Revenue Service would not disclose whether it is conducting a probe, saying only that JEC currently has tax-exempt status.

"We are looking at a number of organizations that are handing out tax deductions in return for donated property," IRS spokesman Larry Wright said.

*The San Francisco Examiner reported Sunday that JEC owes $11,000 in overdue property taxes to the city.

But Jerry Klein, a permit consultant for JEC, said he has been working with the county assessor's office to clear up the problem. "We will not be owing any taxes," he said.

*Parents of Beth Aharon Day School in San Francisco, one of the chief beneficiaries of JEC funds, defended the elementary school's education in an ad in today's Jewish Bulletin.

Dr. Rafael Elul, the father of three Beth Aharon students, called the education there "excellent."

"I think the school is very positive," he said.

Part of the current controversy centers on JEC's frequent and varying radio ads, many of which have appealed for help to needy families.

According to the latest report filed with the state, few of the donated cars have been turned over to poor families.

The charity reported donations of 6,166 cars worth $4.52 million from December 1993 through July 1995.

Sixty-one of the cars were given outright to the needy, 288 were sold at a discount to the poor, and 5,817 were sold at auctions that brought in $3.47 million.

During this period, the charity reported $2.76 million in expenses, including $713,000 for advertising, $425,000 for towing, and $111,000 for telephone and utility bills.

Of the auction's revenue, $421,000 went to Beth Aharon and $29,000 was given to immigrants in cash.

Despite the media attention, the JEC plans to continue with its car auctions. Pil projected car solicitations in the San Francisco, Los Angeles and New Jersey areas will raise more than $7 million this year.

George Youngerman, JEC's marketing director, maintained the advertisements aren't deceptive. He noted that none of the radio stations airing the ads, including the Bay Area's KGO and KCBS, has canceled JEC's accounts.

"It was not JEC's intention to mislead anybody through the ads," Youngerman said. "The ads do state that car donations go to fund JEC programs."

Among the Journal's disclosures about the Pils' financial status were that the rabbi drives a donated 1990 Cadillac and the family rents a $472,000 Richmond District home purchased last summer by Mattie Pil's 24-year-old brother. At the same time, Beth Aharon Day School appears rundown.

But Pil denied any wrongdoing, saying the Cadillac is worth only $3,000. "I don't drive a Jaguar," he said.

The couple draw a combined salary of $84,000 per year, he said. "I don't know what is wrong with this."

He described the four-bedroom home that the family rents for $2,019 per month as "normal" and even "a little small" for the couple and their seven children.

The day school, which has rented its building from the adjacent Congregation Chevra Thilim since 1988, has been looking for a new site because its lease ends this summer.

Pil said auction proceeds paid for scholarships toward the $6,000 annual tuition for "97 percent" of the school's 85 students, rather than funding massive renovations of the school. The cash likewise funds scholarships for a "majority" of the 400 to 450 children who attend the school's summer camp, he said.

As for the boys from the Chernobyl area, they receive free medical care, education and lodging that Pil estimates will cost about $300,000, though he acknowledges the project has received many free or reduced-cost services.

In addition, JEC is negotiating the purchase of a $900,000 building that will double as a synagogue and community center for emigres. Pil estimates that renovations and seismic upgrades for the 10,000 square-foot building at 11th Avenue and Clement Street will cost $800,000 to $900,000.

Pil hopes the image problems will be cleared up once the JEC files its latest financial disclosures for its fiscal year that ended March 31.

Meanwhile, the controversy has led other Jewish agencies to wonder how the matter will affect them.

Wayne Feinstein, executive vice president of the S.F.-based Jewish Community Federation, said he has heard a lot of concern expressed since last week about the "sacred obligation" of charities to use donations as promised.

"The suggestion that very little finds its way toward charitable purposes becomes an embarrassment," he said of JEC's activities.

But Pil, a Chassidic Jew and an emigre from the former Soviet Union, criticized Feinstein for making such comments.

"That's embarrassing, hurting another Jew," Pil said. "It's embarrassing for Jewish people to fight among one another."