web analytics
August 23, 2014 / 27 Av, 5774
Israel at War: Operation Protective Edge
 
 
At a Glance
News & Views
Sponsored Post
Jerusalem Mayor Nir Barkat (L) visits the JewishPress.com booth at The Event. And the Winners of the JewishPress.com Raffle Are…

Congratulations to all the winners of the JewishPress.com raffle at The Event



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.

SocialTwist Tell-a-Friend

Current Top Story
4 yr old Israeli Daniel Tregerman, murdered by Hamas rocket on Aug. 22, 2014.
IDF: Israeli Toddler Murdered by Rocket Fired Near UNRWA School/Shelter
Latest News Stories
4 yr old Israeli Daniel Tregerman, murdered by Hamas rocket on Aug. 22, 2014.

Hamas murdered a 4 yr old Israeli boy with a rocket launched next to an UNRWA school/shelter for Gazan refugees.

Photo: Rotter.net / Tikonist

5:33pm Shabbat Shalom from Israel. It should be a peaceful Shabbat. 5:28pm Kerem Shalom 5:26 pm Kerem Shalom 5:22pm Nachal Oz 5:13pm Erez, Miflasim 5:13pm Gaza perimeter/Sderot, Erez, Miflasim 5:13pm Gaza perimeter/Sderot 5:02pm Erez, Miflasim 5:02pm Gaza perimeter/Sderot, Erez, Miflasim 5:02pm Gaza perimeter/Sderot 4:04 pm Sdot Negev, Shaar Negev 4:00 pm Sdot Negev, Shaar Negev […]

Living in Israel is an open ticket against intermarriage. Above: MK Tzipi Hotovely and Or Alon at their wedding last year.

If you are worried about your child marrying a non-Jew, and you should be, then move to Israel.

It is believed that this is a photo from the Friday afternoon execution outside a Gazan mosque.

Hamas publicly executed 21 people they accused of collaborating with Israel. Unlike ISIS, they didn’t behead them.

One woman fighter is enough to scare away 72 virgins.

Israel remains a lone outpost for those who know that talking to liars is not a diplomatic solution.

Obama, who is sure the “peace process” will make Hamas safe for democracy, now has crowned himself an expert on radical Islam.

There were soldiers inside the attacked Hebron building, but they managed to get out in time.

On Thursday, the Israel Air Force hit a motorcycle transporting 2 terrorists in Rafah.

Temple University’s SJP claims the pro-Israel Jewish student harassed and provoked them into assaulting him.

The White House has unblocked the weapons shipment to Israel that they had recently blocked.

10:58pm Negev 10:32 pm Eshkol 9:38 pm Ashdod, Ashkelon, Ashkelon Coast 8:47 pm Modiin-Maccabim-Reut, and area. Iron Dome Interception. 8:46 pm Beit El 20:00 pm  Iron Dome downs two rockets over Be’er Sheva; three others explode in open areas. 19:42 pm     Two warnings of rockets in Be’er Sheva, warnings of rockets Hatzerim , site […]

The IDF readies what it does not want unless there is no alternative – a deep ground invasion of Gaza. Hamas also is ready.

If “the only thing we have to fear is fear itself,” Diaspora Jews are in big trouble.

The security cabinet authorised Thursday the emergency call-up of 10,000 IDF reservists. Defense Minister Moshe Ya’alon said Israel would continue to pursue Hamas leaders anywhere and at any time, and added that the current campaign would “take time.” Ya’alon called on the Israeli public to display patience and strength while the army deals with the […]

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.

    Latest Poll

    Do you think the FAA ban on US flights to Israel is political?






    View Results

    Loading ... Loading ...

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: