We solved the encoding issue by setting the CHARSET value in the inbound FTP adapter's settings to "@UTF8".

I do not know if this was the right way to fix this and I need to do more research with it.   Setting the CHARSET value to "cp1252" or "hebrew" or "windows-1252" or "cyrillic" - basically anything other than "binary" or "UTF-8" - seems to work just fine. I really don't understand character sets right now.

Here are some pages I ran into while researching this:

• What does InterSystems say about the CHARSET options for the inbound FTP adapter: 
  https://docs.intersystems.com/latest/csp/docbook/DocBook.UI.Page.cls?KEY=EFTP_Charset
• What about Translation Tables? 
  http://docs.intersystems.com/latest/csp/docbook/DocBook.UI.Page.cls?KEY=GORIENT_ch_localization
• The "Character Encoding" value in the Recordmap's properties seems to apply only for the sample file used to build the Recordmap, but not for  files going through the compiled recordmap later on: 
  http://docs.intersystems.com/latest/csp/docbook/DocBook.UI.Page.cls?KEY=EGDV_recmap