web analytics
April 28, 2015 / 9 Iyar, 5775
At a Glance
News & Views
Sponsored Post


Madoff Scandal Rocks Jewish Philanthropic World

  The securities fraud of Bernard Madoff has rocked the Jewish nonprofit world – and the worst may be yet to come.


  Madoff, the founder of Bernard L. Madoff Investment Securities LLC, was arrested Dec. 11 after admitting to his board that a hedge fund he ran was essentially a $50 billion Ponzi scheme.


  At least two foundations have been forced to close because they had invested their funds with Madoff.


  The Robert I. Lappin Foundation in Salem, Mass., announced Dec. 12 that it would shut down after losing $8 million – all of its money. (See story, page 12.) And 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 its closing Dec. 14.


  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 website 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 board chairman of the university’s Sy Syms School of Business until he resigned last week, said the school has lost at least $100 million. University officials declined to offer any specifics.


  Just as the reverberations of the subprime mortgage collapse are still seen as contributing to the nation’s wider economic meltdown, philanthropic insiders say the fallout from Madoff’s scheme could be even greater. The insiders note that Madoff and others heavily invested in his fraudulent fund were major supporters of a plethora of nonprofit organizations, served on their boards or advised those organizations on how to invest their money – in some cases placing large sums of the groups’ capital in Madoff’s hands.


  Reflecting this sense that the full extent of the damage is still unclear, the executive vice president and CEO of the UJA-Federation of New York said that even though its endowments were not exposed, the organization still could be hurt if donors lost money in the scheme.


  “We do not yet know the full extent of the losses that supporters of UJA-Federation and other Jewish institutions have had,” John Ruskay said. “But we have already heard that many major institutions had substantial funds invested, as did foundations. Already in the context of a very challenging economic environment this will present another significant difficulty. We don’t know yet the extent of the wreckage.”


  Reports are trickling out in the national media about prominent businessmen from across the country who lost money in Madoff’s scheme.


  New York Mets owner Fred Wilpon, GMAC Financial Services chairman J. Ezra Merkin and former Philadelphia Eagles owner Norman Braman all were reported to have taken significant hits due to their dealings with Madoff, who reportedly would not accept any investment in his fund below $10 million.


  Reports have surfaced also that media magnate Mortimer Zuckerman was significantly hurt by investing with Madoff.


  In Los Angeles, the Jewish Community Foundation’s $238 million Common Investment Pool lost $18 million it had invested with Madoff, according to a letter sent out by the foundation.


  Among other Jewish institutions and foundations believed to be hit by the Madoff scandal: the American Jewish Congress, the Technion-Israel Institute of Technology, Steven Spielberg’s Wunderkinder Foundation, Elie Wiesel’s Foundation for Humanity and Carl Shapiro’s charitable foundation.


  But Merkin, who last week told investors in his hedge fund, Ascot Partners, that all of their money had been defrauded by Madoff, is of particular interest to the Jewish community. He has philanthropic ties to a number of Jewish organizations and institutions, serving as a volunteer investment adviser for many of them, including Yeshiva University. Among other causes with which he is said to be connected are the SAR Academy, a Jewish day school in the Bronx, as well as State of Israel Bonds, The Jewish Campus Life Fund, Elaine Kaufman Cultural Center, the Ramaz School, Congregation Kehilath Jeshurun and the Fifth Avenue Synagogue.


  Sources say that several of these entities had money in Ascot, which they now stand to lose because of Merkin’s decision to invest so heavily in Madoff’s fund. According to Orthodox communal insiders, Ramaz and SAR lost millions between them.


  An official at one major Jewish foundation told JTA that it had been advised to invest with Madoff, but decided against it after concluding that his return-on-investment forecasts seemed too good to be true.


  Certainly the extent of the damage to the philanthropic world could become clearer as details emerge in coming days and weeks of just who was invested with Madoff.


  With each day since news of the fraud broke, new organizations and funders have emerged as victims. Yad Sarah in Israel, the Maimonides School in Boston, the Charles I. and Mary Kaplan Foundation in Rockville, Maryland, and the Julian J. Levitt Foundation are among those who have announced losses.


  One philanthropic official said there is a lesson to be learned here for the philanthropy world, where Jewish businessmen and philanthropists directed their own private funds and the funds of institutions that they help oversee toward Madoff.


  “What really emerges out of this,” said Jeffrey Solomon, the president of the Andrea and Charles Bronfman Philanthropies, is that “people sometimes forget to conduct the due diligence when dealing with others with social prominence – and especially in the hedge-fund area where people think you have to be really smart to be in hedge funds. In many ways for all investments something like this is tragic, but for nonprofits where boards have the fiduciary responsibility of acting with great prudence, it is even more tragic.”


  According to a fund-raiser who has been scouring recent 990 tax filings to see how this might affect his nonprofit, several other major philanthropists have put money in Madoff’s hands: As of the end of 2007, Sandy Gottesman had $20 million of his foundation’s $144 million invested with Madoff and Robert Beren had two foundations with more than that in endowments invested with Ascot. U.S. Sen. Frank Lautenberg (D-N.J.) says his foundation has about $15 million invested with Madoff.


  Yeshiva University issued a statement via e-mail to JTA on Sunday.


  “We are shocked at this revelation,” the university said. “Bernard Madoff has tendered his resignation from all positions affiliated with the university and involvement with the university. Our lawyers and accountants are investigating all aspects of his relationship to Yeshiva University. We reserve our comments until we complete our investigation.”

(JTA)

About the Author:


If you don't see your comment after publishing it, refresh the page.

Our comments section is intended for meaningful responses and debates in a civilized manner. We ask that you respect the fact that we are a religious Jewish website and avoid inappropriate language at all cost.

If you promote any foreign religions, gods or messiahs, lies about Israel, anti-Semitism, or advocate violence (except against terrorists), your permission to comment may be revoked.

No Responses to “Madoff Scandal Rocks Jewish Philanthropic World”

Comments are closed.

Current Top Story
The Straits of Hormuz
Iran Seizes Cargo Ship Under US Protection in Strait of Hormuz
Latest News Stories
Inspecting a turkey coop in Israel.

AgriTech startups feature new crops, treatments, waste reduction and yield enhancement at Israel’s AgriVest conference.

The Straits of Hormuz

Iranian Revolutionary Guard Corps operatives seized a Danish cargo ship in the Strait of Hormuz early Tuesday. No word on wounded.

Husan Underpass

The Husan underpass in Gush Etzion connects Husan and Beit Lechem under Highway 60. It’s also the site of stone throwing and other attacks.

Desperate crowd awaits relief aid at Yarmouk Palestinian refugee camp in Damascus.

The US has given more than $57M to UNRWA for ‘Palestinian’ refugees in Syria in 2015 alone, but only pledged $10M for Nepal?

Arab stone throwers lightly injured a person near the Husan Bypass in Gush Etzion.

On Monday, 2 El Al planes flew out carrying out more than 200 doctors, sanitation engineers, machinery technicians, as well as medical equipment including oxygen tanks, medical ventilators, X-ray machines, medicines and engineering equipment…

“How do you explain your position in a way that they will stop writing that you’re an anti-Semite?” asked the Yated Ne’eman editor-in-chief.

UNRWA is proud because Hamas only stored mortars in their schools, not rockets, according to the UN inquiry.

U.S. officials have acknowledged that Iran-supported Shiite violence in Iraq and Yemen has been influencing the talks between the U.S. and Iran on the latter’s nuclear program

12:46 PM: Now this is interesting: A Syrian army source told the Lebanon news outlet, Elnashra: A number of rockets were launched at IDF positions near the border. Syrian rebel forces then launched mortars at the source of the Syrian rocket fire. The Syrian army is on high alert in readiness for an Israeli assault. […]

German Soccer fans were told to stop waving their Israeli flags.

The UN’s BOI report about the 2014 Gaza War documents the exploitation by Hamas of UN facilities.

The Russian government’s plan to rid the capital Moscow of swastikas and everything else of Nazi origin, in time for Victory Day.

Since 2014, the Border Police have become a favorite target for Arab terrorists.

Miller would like a chance to tell the court it’s time to “put the Jews on trial where they belong.”

Two Israelis were hurt in road terror attacks Monday, and a 16 year old Arab teen was shot while attacking a motorist.

More Articles from Jacob Berkman

After discovering $7 million in fraudulent payments, the Claims Conference is facing questions about whether it will recover the money and how extensive the fraud actually was.

After discovering $7 million in fraudulent payments, the Claims Conference is facing questions about whether it will recover the money and how extensive the fraud actually was.

Bernard Madoff was sentenced Monday to 150 years in jail, the maximum allowed for his crimes.

U.S. District Court Judge Denny Chin during the sentencing called Madoff’s crimes “staggering.”

Bernard Madoff was sentenced Monday to 150 years in jail, the maximum allowed for his crimes.
U.S. District Court Judge Denny Chin during the sentencing called Madoff’s crimes “staggering.”

Three of the largest local Jewish federations in the United States announced significant layoffs during the past two weeks, raising concerns about the future health of the country’s main Jewish charitable network.

Three of the largest local Jewish federations in the United States announced significant layoffs during the past two weeks, raising concerns about the future health of the country’s main Jewish charitable network.

The Yeshiva Elementary School, an Orthodox institution in Miami Beach with about 450 students, was in dire straits in late 2008. It was behind on payroll, in significant debt and facing financial collapse.

The Yeshiva Elementary School, an Orthodox institution in Miami Beach with about 450 students, was in dire straits in late 2008. It was behind on payroll, in significant debt and facing financial collapse.

Printed from: http://www.jewishpress.com/news/madoff-scandal-rocks-jewish-philanthropic-world/2008/12/17/

Scan this QR code to visit this page online: