Religion & Beliefs
Fallen Banker Takes Jewish Charities With Him
By Lilit Marcus / December 14, 2008
As the finance world reeled during the past week from the revelation that investment banker Bernard Madoff had been running a complex Ponzi scheme that defrauded his investors, a ripple effect was felt in the Jewish community. Madoff had funded or endowed many Jewish organizations, some of whom counted him as their sole or most generous donor. This weekend, the Robert I. Lappin Charitable Foundation, whose motto was "help keep our children Jewish" and funded programs like day camps and Hebrew schools for children who otherwise might not have a Jewish upbringing, posted the following message on their website:
The programs of the Robert I. Lappin Charitable Foundation and the Robert I. Lappin 1992 Supporting Foundation are discontinued, effectively immediately. This includes Youth to Israel and Teachers to Israel.
The money used to fund the programs of both Foundations was invested with Bernard L. Madoff Investment Securities and all the assets have been frozen by the federal courts. Mr. Madoff was arrested Thursday morning by the FBI and charged with criminal securities fraud by federal prosecutors. The money needed to fund the programs of the Lappin Foundations is gone.
The Foundation staff has been terminated today.
“It is with a heavy heart that I make this announcement,” said Robert I. Lappin, Foundation trustee. “The Foundations’ programs have touched thousands of lives over many years in our efforts to help keep our children Jewish.”
While the Lappin Foundation appears to have been the hardest hit, it may not be the only casualty in the Jewish philanthropic world. According to Bloomberg, one of the investors who lost a significant amount of money in Madoff’s scheme was Carl Shapiro. Shapiro and his wife Ruth are allegedly out $145 million thanks to Madoff, and this could have adverse effects on The Carl and Ruth Shapiro Family Foundation, which supports Jewish hospitals, arts programs, education, and more in the Boston and Palm Beach areas.
Within the next week, more organizations may feel the repercussions of Madoff’s wrongdoings.
Update: December 15
According to JTA, several other charities and organizations are now being brought into the Madoff scandal:Â
The Chais Family Foundation, which gives out some $12.5 million each year to Jewish causes in Israel, the former Soviet Union and Eastern Europe, announced Dec. 14 that it had closed after losing all of its money through investments with Madoff.
At least one nonprofit is calling out for help in the wake of Madoff’s collapse: The Gift of Life Foundation, a Jewish bone marrow registry that relied heavily on Madoff as a benefactor, announced on its Web site Sunday that it would immediately need to raise $1.8 million to make up for recent losses.
Sources close to Yeshiva University, where Madoff served as treasurer of the board of trustees and chairman of the board of Y.U.’s Sy Syms School of Business until he resigned last week, said that the school has lost at least $100 million. But Y.U. officials declined to offer any specifics.
For a great chart of every group or individual who has a proven link to Madoff, check out the hedge fund website finalternatives.com. The ever-growing list includes everyone from the Wunderkinder Foundation (Steven Spielberg’s charity) to the town of Fairfield, Connecticut’s pension fund.
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I’ve been reading the headlines about the flood of anti-Semitic stuff on the Internet in the wake of the financial meltdown and Madoff. Here’s something I posted on the Jerusalem Post:
"The problem is, the facts are there for anti-Semites to exploit. We complain that mainstream Muslims aren’t zealous enough in condemning terrorists, yet we ourselves seem impassive at our own malefactors. We can’t just scoff at anti-Semitic trailer park trash. Why not bring back cherem and niddui — expulsion? We must loudly proclaim that those who shame our community are anathema to it. We cannot hide our heads in the sand and allow the anti-Semites to take the initiative. We have the tools to preempt and neutralize opportunistic anti-Semites. Let’s use them !"
Tools for combating the tools. What an idea!
Of course, many will say, "Hey, if he were Catholic, people wouldn’t cry, ‘It’s a Catholic plot!’" (Well, in Merrie Olde England they might have cried it.) The thing is, this meltdown and the scams which gave rise to it are monumental, and almost every figure associated with them is indeed Jewish. Of course there’s no conspiracy, no "Get the goy!" but the implication of one, no matter how we fight it, even in our own minds, is compelling.
The vast majority of Muslims are not terrorists. The vast majority of Jews are not crooks. These platitudes are equally lame, equally unsatisfying. This is a big problem. As Barbara says, "We should tar and feather these guys." Any less, and the anti-Semitic blowback will only get worse.
http://s.wsj.net/public/resources/documents/st_madoff_victims_20081215.html
Ivan Boesky was bad enough. We should tar and feather these guys, and make it a lot clearer in our community that honest is better than successful, if it has to be one or the other. We have to show better appreciation for our good, hard working honest Jews and give less honor to fame and financial success.
Please attempt to retain some modicum of interpretation before you spew vague epigrams and sentiments back at a message board. Did the foundations not reap the benefit of these investments for years? Did they ever engage an advisor smart enough to tell them that having a single manager for a disproportionately large part of their endowment wasn’t sound?
Take just a second to remember that someone had to endorse the checks of donation he and his company sent out, and perhaps it was outsized egotistical philanthropic goals that led to this ‘tragedy’.
@Rock,It’s a surprise because it is happening on a heretofore unimaginable scale. It is beyond the scope of any other financial fraud.
Rebecca, not enough is known yet to label the Madoff thing a right-wing plot, OK? Even the prosecutors have no idea of the scope or shape of this thing, and won’t for some time. We should not run for quick comprehension based on nothing, merely because we are scared not to know what’s going on. That’s mere superstition. Conspiracy theories based on no evidence are not helpful, in stressful times. Don’t have loose lips. You are supposed to be a disciplined intellectual.
That some of the most progressive and longstanding Jewish oragnizations have been decimated smells to me of more than fraud. Madoff seems to have targeted organizations who have done the most good not only for Jews, but Jewish relationships across class, race and religion. Elie Weisel’s humanitarian work comes to mind, but so do several other organizations who now must shut their doors, leaving a tremendous gap of pregressive support–just the forces necessary to support a more workable solution at home and in Israel. Perhaps I am cynical, but I find Madoff’s actions motivated by pathology, greed, and yes, ideology. Am I the only one who feels this way? As someone who worked with many of the organizations now bankrupt, I feel a tremendous sense of loss and conern for the decades old Jewish community, national and abroad so perhaps I am biased. But I fear this a truly ominous sign of things to come.Â
Rather than be hateful and whine, why not dig deep and try and help out these victimized charities.
"The only excuse people used who didn’t invest with him was that something smelled wrong since he posted 10% returns regardless of the market’s overall performance — but even they couldn’t find anything wrong."
They couldn’t find anything wrong because Madoff refused to give details of his operations, citing the need to protect his proprietary techniques. When a guy consistently produces 10% returns despite market behavior and refuses to give an account of his methods, even the financially unlettered may cock an eyebrow.
On the plus side, one of Madoff’s victims was the dolorous hypocrite Elie Wiesel, which I guess goes to show that even great crimes can have a bright side.
tellner, the pain and restrictions that are going to take hold in the Jewish community are ominous.
Ever since Reagan we’ve been saying that "good corporate citizens" and "business self-regulation" were an invitation for massive fraud. We were right. The conservatives were wrong. And now that the money is all safely wasted and in the hands of the obscenely wealthy we are hosed. The really notable thing about this affair is that the Ruling Class is also feeling some of the pain.
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