Jeremy Ben-Ami had indicated truthfully at J Street's start that Soros had withdrawn himself from the original planning, but he did not reveal that Soros had subsequently become a major donor. Ben-Ami was under no legal obligation to do so; it is debatable whether this was an ethical breach.
Still, a number of politicians friendly toward J Street reportedly feel betrayed. And this has made J Street backing into fodder for Republicans opposing Democrats who have such funding.
Soros originally withdrew his public backing for J Street because he knew that his name is radioactive in some circles. His association with human rights groups, including some critical of Israel, is part of the reason for the controversy. But such activism by Soros does not make him anti-Israel. This notion is unfortunate and reminds us that public discourse has little tolerance for nuanced or complex points of view.
The best coverage of this matter that I've seen so far is in today's new Forward, both the article by Nathan Gutman and its editorial. The Forward's editorial sums up the Soros controversy nicely:
In a now infamous 2007 essay, he wrote: “I am not a Zionist, nor am I am a practicing Jew,” and then added immediately, “I have a great deal of sympathy for my fellow Jews and a deep concern for the survival of Israel.” Expressing sympathy and concern may not be the same as donating millions to a university in Israel, or a soup kitchen in Brooklyn, but neither is it cause for excommunication.
Meanwhile, his other oft-maligned statement — in which critics accuse him of blaming Israel and Jews for anti-Semitism — hardly seems so incendiary when read in context: “Anti-Semitism predates the birth of Israel. Neither Israel’s policies nor the critics of those policies should be held responsible for anti-Semitism,” he wrote in 2003. “At the same time, I do believe that attitudes toward Israel are influenced by Israel’s policies, and attitudes toward the Jewish community are influenced by the pro-Israel lobby’s success in suppressing divergent views.”