‘Madoff’: Dreyfuss takes on the man behind the Ponzi scheme

Of all the shocking scandals that emanated from the 2008 financial market crash, the most notorious is that of Bernie Madoff, the investment adviser who infamously defrauded clients out of billions of dollars in the largest Ponzi scheme in American history.

The story of Madoff’s rise and fall, how he managed to steal from friends and charities — including Hadassah and the Elie Wiesel Foundation — as well as how he fooled his family and lined his pockets with victims’ retirement portfolios, nest eggs and college funds is the subject of “Madoff,” a miniseries airing Feb. 3-4 on ABC, starring Richard Dreyfuss as Madoff and Blythe Danner as his wife, Ruth. 

“Everyone knows the name and what he did, but there’s so much more to it,” executive producer Linda Berman said. “As we developed the script and even during production, we were all fascinated to find out things about the story and the family that were never told to the public. He never invested a single dollar. He just put all the money into his bank account.” 

Madoff also betrayed his own family, lying to his brother, sons and Ruth, and cheating on Ruth with another woman. But Dreyfuss believes that because he was so affable, he was able to get away with the unforgivable.

“In order for him to be as successful as he was at this scam, he had to be an enormously likable and charming guy — you couldn’t help but like him,” Dreyfuss said in a recent interview. “Then you realize that he was, metaphorically, raping children and stealing their futures, and that’s impossible to forgive.”

Dreyfuss didn’t hesitate to accept the role, to Berman’s delight. “Richard is an extremely likable guy, and we needed someone that you didn’t automatically hate,” she said.

The Academy Award-winning actor likens Madoff to a villain in a Shakespearean tragedy. “This is an epic story of crime, an epic rise and an epic fall. That’s Shakespearean,” Dreyfuss said. 

Other Bard-worthy themes, including betrayal and the sins of the father, are evident in the story, as well. And while Berman thinks Madoff’s actions may have contributed to the stress that led to some family members’ tragic fates, including his son Mark’s suicide, Dreyfuss doesn’t think divine retribution had anything to do with it. “I don’t think you have to believe in a vengeful God to understand his story,” he said.

Although he said he finds playing admirable characters in films such as “Mr. Holland’s Opus” and “The Goodbye Girl” “more satisfying than playing Bernie or Dick Cheney,” Dreyfuss doesn’t think villains are more difficult to portray. “If you’re honest with yourself, you can find Bernie Madoff in your own life and behavior. Impulses to lie, cut corners and serve yourself happen to people all the time, and an actor’s job is to build on those instincts and make them fit the larger story,” he said.

“Madoff” was based in part on “The Madoff Chronicles” by Brian Ross. “But that was just a jumping off point for us,” Berman said. “We did a lot of research, used other books and articles and interviews with people. We spoke to Eleanor Squillari, who was Madoff’s longtime assistant, and interviewed some people who had invested with him.”

Danner spoke with Ruth Madoff and Dreyfuss talked to some fraud victims, but the actor said he had no interest in speaking to Madoff himself. “The chances were that he wasn’t going to tell me the truth, and I wasn’t interested in listening to him rationalize or justify,” Dreyfuss said. “I would have been interested, I suppose, in listening to his Queens accent, but I heard it from a lot of other sources.”

“Madoff” was shot on a modest budget in eight weeks entirely in New York and on Long Island in many of the story’s actual locations. That lent authenticity, but some artistic invention was necessary. “We had to take some dramatic license in re-creating conversations between people because we didn’t know exactly what was said,” Berman said. 

“Life does not fit into a three-act break,” Dreyfuss added. “You have to do some condensing and combining and stuff like that. You always have to do some condensing and combining. If it wasn’t accurate, it was certainly not with intention.” 

“Madoff” includes many Jewish-themed references, scenes and some cast members (Lewis Black and Charles Grodin, among them), but was there concern about the ramifications of a Jewish villain? “We were very careful not to portray this as an anti-Semitic story. It’s a global story … a much bigger story,” Berman said.

Dreyfuss pointed out that Madoff scammed Jews because that’s who he knew, and when he discovered there were Christians in the world, he scammed them, too. The actor recalled how he responded when his starring role in “The Apprenticeship of Duddy Kravitz” raised issues of anti-Semitism in 1974. “When they said, ‘You’re washing our dirty linen in public,’ I went out and washed some more dirty linen, as loudly as possible.”

“Madoff” also raises important issues about the workings of the financial industry and how Bernie Madoff was able to get away with his scheme. 

“It’s been said that the only way a Ponzi scheme like this could fail is if the world fell apart, and that’s exactly what happened. If it weren’t for the fact that there was a volcanic explosion in the financial world, he could have gone on doing this forever,” Dreyfuss said. 

He believes the current system doesn’t sufficiently protect investors from the failings of the financial industry, and hopes “Madoff” inspires viewers to demand more accountability. If Berman has her way, the film will remind people to ask questions and be absolutely sure with whom they’re dealing before entrusting their money to anyone.

“This movie hopefully will be a cautionary tale,” she said. “Bernie took a lot of people down the rabbit hole with him, and we’re trying to do justice to the story so that people learn from what others went through and don’t fall into that same trap.”

“Madoff” airs Feb. 3-4 on ABC.

Foundation headed by widow of Madoff’s largest beneficiary grants $104 million

Barbara Picower, the widow of Jeffry Picower, the largest beneficiary of Bernard Madoff’s Ponzi scheme, has awarded $104 million in grants over two years through a new foundation.
The grants from the JPB Foundation have centered on medical research, poverty and the environment, Forbes reported, according to tax returns filed with the Internal Revenue Service.
Barbara Picower is listed as president of the Manhattan-based foundation.
Four years ago the estate of Jeffrey Picower agreed to return $7.2 billion to Madoff’s victims. The figure is the difference between the amount of cash that the Jewish investor put into his account with Madoff and the amount he withdrew.
Jeffrey Picower, whose foundation gave to Jewish causes before it was wiped out by the revelation of Madoff’s fraud, was found dead of a heart attack in his swimming pool in October 2009.
Madoff, 76, is serving a 150-year prison sentence in federal prison in Butner, N.C.
The JPB Foundation had $1.1 billion in assets at the end of 2012, more than the Picower Foundation had when it was shut down in 2010, making it one of the 40 largest U.S. foundations.
Tax records show the JPB Foundation has been funded by $1.2 billion in contributions in 2011 and 2012 from the estate of Jeffry Picower, the total after Barbara Picower agreed to return money to Madoff’s victims.

Employer-managed retirement funds ruled ineligible for Madoff restitution

Individuals who lost money from employer-managed retirement funds invested with Bernard Madoff are not eligible to receive money from the liquidation of the Ponzi schemer’s firm.

U.S. Bankruptcy Court Judge Stuart Bernstein ruled Friday that only direct customers of Madoff are eligible for liquidation funds, The Wall Street Journal reported. However, the judge ruled that those who lost in the employer-managed funds may be eligible for the liquidation money if the retirement plan administrators file claims.

Irving Picard, the court-appointed trustee managing claims on Madoff’s estate, has argued that such claims are ineligible because the individuals cannot prove they entrusted their money to Madoff’s firm.

In 2009, Madoff pleaded guilty to 11 felonies for fabricating nearly $65 billion in profits to attract investors. He is serving a 150-year sentence at a federal prison in North Carolina.

His Ponzi scheme hit numerous Jewish philanthropies and investors particularly hard. Among those who suffered were Hadassah, the Elie Wiesel Foundation and the American Jewish Congress.

Madoff’s younger brother sentenced to 10 years for role in Ponzi scheme

The younger brother of Bernard Madoff will serve 10 years in prison for his role in his brother's Ponzi scheme that stole billions of dollars from investors, a U.S. judge said on Thursday.

Peter Madoff, 67, pleaded guilty in June to criminal charges including conspiracy to commit securities fraud for falsifying the books and records of the investment advisory company founded by his brother.

U.S. District Court Judge Laura Taylor Swain adopted prosecutors' recommendations and sentenced Madoff to 10 years in prison. She also ordered him to forfeit what she called a “draconian” $143.1 billion, which she said would seal his “financial ruination.”

“To take his story at face value, he knew that the business operation was a little bit crooked, and he was content to go along with that,” Swain said. “We all know that a crooked operation is rarely if ever just a 'little bit' crooked.”

The judge said Madoff's prison term would begin on Feb. 6 and said she would recommend he serve it at a federal prison in Otisville, New York. His lawyers had asked that he remain free until after his granddaughter's Bat Mitzvah on Jan. 19. He was also sentenced to one year supervised release following prison.

“I am deeply ashamed of my conduct,” Peter Madoff said at the sentencing. “I accept full responsibility for my actions.”

Of 13 individuals charged criminally in connection with the fraud, Peter Madoff is the only one, other than his brother, who was a member of the Madoff family. Bernard Madoff, 74, was sentenced in 2009 to a 150-year prison term and was ordered to forfeit $170.8 billion.

With Madoff looking on, two victims of the Ponzi scheme urged the judge to show no leniency. Customers were defrauded out of about $20 billion in the Ponzi scheme, according to the trustee charged with recovering money for the victims.

“I ask that you show the same degree of compassion to Peter Madoff as he showed us: None,” said Michael DeVita, one of the victims.


Peter Madoff, a lawyer, had been chief compliance officer and a senior managing director at the firm, Bernard L. Madoff Investment Securities.

He said he didn't know Bernard Madoff was operating the massive Ponzi scheme until shortly before his brother's arrest in December 2008.

But prosecutors said Peter Madoff helped create false and misleading documents designed to make it appear that the firm had an effective compliance program. If the firm had such a program, prosecutors said it would have shown that no real trades were taking place.

“Peter Madoff carried out his part of an epic fraud,” Lisa Baroni, a prosecutor, said. “He lied repeatedly to regulators and investors.”

Peter Madoff also transferred millions of dollars within the Madoff family to avoid tax payments to the Internal Revenue Service and also put his wife on the firm's payroll in a no-show job.

In December 2008, as Bernard Madoff's firm neared collapse, prosecutors said Peter Madoff also agreed to send $300 million remaining in its accounts to certain employees, family members and friends. Those funds were never dispersed, as the firm instead folded as Bernard Madoff was arrested.

Manhattan U.S. Attorney Preet Bharara in a statement called Peter Madoff a “gatekeeper,” who enabled the fraud instead of protecting against it.

“The decade he will spend in prison and the disgorgement of his assets are a just result,” Bharara said.

But Amy Luria, another victim whose grandmother had put Peter Madoff in charge of her estate, argued during the hearing that he should be sentenced for the roughly four decades that he worked for his brother's firm.

“The option of Peter Madoff going to jail for just 10 years does not seem just,” she said.

The $143.1 billion the judge ordered Madoff to forfeit was the total investors paid into Bernard Madoff's firm from 1996 to 2008, prosecutors said.

Among the assets being forfeited are all of his wife and daughter's assets, several homes, a Ferrari and more than $10 million in cash and securities. His wife, Marion, was left with $771,733.

The Justice Department earlier this week filed a motion seeking a court order finding that restitution isn't practical, allowing it to distribute the forfeited assets.

The Justice Department said Thursday it had hired a special master, former U.S. Securities and Exchange Commission Chairman Richard Breeden, to administer compensating victims.

To date, the government has recovered more than $2.35 billion, the Justice Department said in a court filing Thursday.

The case is U.S. v. O'Hara et al, U.S. District Court, Southern District of New York, No. 10-cr-00228.

Mets’ owners settle lawsuit in Madoff Ponzi scheme

The owners of the New York Mets will pay up to $162 million to settle a “clawback” lawsuit filed in the Bernard Madoff Ponzi scheme.

Fred Wilpon and his brother-in-law Saul Katz will not have to make payments for three years under the agreement.

The lawsuit was settled Monday morning in Manhattan Federal Court just hours before jury selection was set to begin in the civil trial.

Irving Picard, the trustee charged with recovering billions of dollars in assets stolen in Madoff’s scheme, filed the lawsuit seeking more than $300 million that Wilpon and Katz allegedly made through the scam. A ruling blocked Picard from trying to collect the full $1 billion he sought to recoup.

Picard said the team owners knew that Madoff’s investments were a sham but continued to invest because of the large returns. Lawyers for Wilpon and Katz said their clients had no idea the investments were fraudulent.

Picard has filed hundreds of similar lawsuits seeking to regain money from those who profited the most from the scheme. The money will go into a fund to help victims of Madoff’s scheme.

Madoff pleaded guilty to fraud charges three years ago in the more than $17 billion scheme. Picard reportedly has recovered about $11 billion of the invested principal lost in the scheme. 

The Mets’ owners had to sell part of the National League team and have had to cut its payroll because of the ramifications of the scheme and lawsuit.

Madoff says he is happier in prison than free

Financial swindler Bernard Madoff said that he is happier in prison than he was on the outside because he no longer lives in fear of being arrested and knows he will die in prison, TV journalist Barbara Walters said on Thursday.

Walters, who spent two hours at the prison with Madoff two weeks ago, also told ABC’s “Good Morning America” program that Madoff said that while he had contemplated suicide during his early days behind bars, he lacked the courage and never thinks about killing himself now.

Madoff is serving a 150-year prison term for bilking investors out of billions of dollars in a decades-long Ponzi scheme that is considered the biggest financial fraud in U.S. history.

Madoff’s wife, Ruth, said in an interview to be aired on CBS’s “60 Minutes” program on Sunday that the couple actually tried to kill themselves by taking pills on Christmas Eve 2008 after the fraud was exposed.

“I don’t know whose idea it was, but we decided to kill ourselves because it was so horrendous what was happening,” Ruth Madoff said of the failed attempt.

Walters did not address the subject of suicide on Thursday. She said Madoff and his wife are now estranged.

The couple’s elder son, Mark, 46, hanged himself in his New York apartment on Dec. 11, the second anniversary of his father’s arrest. Mark and Andrew Madoff turned in their father to authorities a day after he confessed to them.

Walters said Madoff, 73, was distraught over his son’s suicide, and that his wife wanted to stop visiting him in prison after that and he agreed. He has not seen her since, Walters said.

“Ruth does not hate me. She has no one, and this is not fair to her,” Walters quoted Madoff as saying.

“He has terrible remorse, he says he knows that he ruined his family,” Walters said, adding that Madoff told her that with the help of therapy he does not think about what he has done, but “at night he says he has horrible nightmares.”

The interview, one of several involving the Madoff family to surface in the past week, was not filmed because cameras are not allowed in the North Carolina facility where Madoff is serving time.

Walters said Madoff speaks of being happier now because for the first time in 20 years he has no fear of being arrested.

“I feel safer here than outside,” Madoff told Walters.

“I have people to talk to, no decisions to make … now I have no fear because I’m no longer in control” and “know that I will die in prison,” she said he told her.

As for his crimes, Madoff said, “the average person thinks I robbed widows and orphans. I made wealthy people wealthier.”

Walters said Madoff told her, “every once in a while I find myself smiling, and I’m horrified.”

Mark Madoff’s widow Stephanie said in interviews ahead of the publication of her book that Madoff had boasted in a letter to her of being treated like a celebrity, and Walters corroborated this, saying that he told her the prisoners, “especially the younger ones,” treat him with respect.

Reporting by Chris Michaud; editing by Greg McCune

Ruth Madoff says she and Bernie attempted suicide in 2008 [VIDEO]

Ruth Madoff said in an interview that she and her husband, Ponzi schemer Bernard Madoff, attempted to commit suicide in 2008.

Ruth Madoff told The New York Times that she and her husband made the attempt on Christmas Eve of that year in their Manhattan penthouse by overdosing on Ambien, a common sleeping drug.

She told the Times that although she could not remember whose idea the attempt was, she and her husband “were in agreement—we were both sort of relieved to leave this place. It was very, very impulsive.”

Story continues after the jump.

The suicide attempt came two weeks after Bernard Madoff was arrested for running a $64.8 billion Ponzi scheme. Three months later he pleaded guilty; he is serving a 150-year sentence in federal prison.

The Madoffs’ son Mark committed suicide last December. His widow, Stephanie Madoff Mack, revealed recently in interviews that it was his second attempt.

Bernie Madoff told the Times via e-mail that suicide “crossed my mind” after his arrest, but he felt he could help make restitution to his victims and he “could not abandon my family.”

Ruth Madoff broke her seclusion at the request of her estranged son Andrew, who had asked her to help promote a new authorized biography, “Truth and Consequences: Life Inside the Madoff Family.” Madoff Mack has also been promoting her own memoir, “The End of Normal.”

Ruth Madoff talks about the suicide attempt on the CBS news magazine “60 Minutes” airing Sunday.

Madoff boasts he is “quite the celebrity” in prison

Imprisoned financial scam artist Bernard Madoff boasted in a jailhouse letter that he is “quite the celebrity” and treated “like a Mafia don,” ABC News said on Thursday.

ABC, which will feature an interview with Madoff’s daughter-in-law on news program “20/20” on Friday, released portions of a letter provided by Stephanie Madoff Mack, whose husband committed suicide in the wake of his father’s conviction in a massive Wall Street fraud.

Mack told ABC she had written Madoff a letter detailing family events he was missing due to his life sentence of 150 years behind bars, as a way of rubbing salt in the wound.

“I thought that that would really sting him,” Mack said, adding that her plan backfired.

The smug-sounding reply from Madoff, whom Mack said she holds responsible for her husband’s death, enraged her.

“As you can imagine, I am quite the celebrity, and am treated like a Mafia don,” Madoff wrote from the North Carolina prison where he is incarcerated.

“They call me either Uncle Bernie or Mr. Madoff. I can’t walk anywhere without someone shouting their greetings and encouragement, to keep my spirit up.

“It’s really quite sweet, how concerned everyone is about my well being, including the staff … It’s much safer here than walking the streets of New York.”

Mack described her reaction as having been “sick to my stomach,” but said she didn’t think she ever showed the letter to Madoff’s son, Mark.

“My husband was in terrible, terrible pain,” she said. “He was so deeply hurt by it all, that he just, he, he just couldn’t move past it.”

Mark Madoff committed suicide in December, two years to the day after Madoff’s arrest in the more-than $50 billion swindle, the biggest Ponzi scheme in U.S. history.

The interview will air on “20/20” on Friday. Mack, whose autobiography “The End of Normal: A Wife’s Anguish, A Widow’s New Life” will be published on October 20, will also appear on “Good Morning America” next week.

Reporting by Chris Michaud; editing by Bob Tourtellotte

The Moral Route to Redemption

It’s hard to imagine a more timely book than “Confronting Scandal: How Jews Can Respond When Jews Do Bad Things” by Dr. Erica Brown (Jewish Lights: $24.99). The book comes too late for Bernie Madoff, but Anthony Weiner needs a copy, and so does DSK.  Indeed, all of us who look on public scandals that involve Jewish figures as a “shanda far de goyim” — a shame in the eyes of the non-Jews — will find it fascinating.

The author tells a story of how she pitched the idea for the book to Stuart Matlins, publisher of Jewish Lights, shortly after the Madoff scandal.  “Erica, are you six months too late?” he asked.  After a flurry of new scandals, she wrote him a prescient note: “Maybe I’m six months too early?”

Although the author offers much good advice on what could be fairly described as crisis management, the core of her book is moral instruction.  “I firmly believe that most people who serve the public in a political or religious capacity start out fired by the greatest of ideals,” she observes. “But something does happen to their own sense of inflated power as they travel down the road to success.”  They sometimes stumble into what she calls “moral quicksand”: “Entitlement,” as Brown puts it, “grows egos too large to fit within the moral standards that everyone else observes.”

She argues that Jewish misconduct is especially consequential because of the tradition of chosenness that is woven so deeply into the Tanakh.  “We are a light unto the nations,” she writes. “Isaiah told us so.”  Like Hebrew National, she quips, we hold ourselves to a higher standard.  Then, too, we seem to carry a gene for anxiety that prompts us to fret whenever a fellow Jew does something wrong: “It is bad for the Jews” is the old refrain. And so the stakes are especially high when the names in the newspaper headlines are Jewish names.

Brown calls on her Jewish readers to own up to the communal issues that arise when a Jewish person goes famously wrong. “”Without naming the problem, we will not take the necessary steps to ameliorate it,” she writes. “Facing, naming, and tackling scandal empowers us for goodness.” She points out, for example, that when the undeniable fact of Jewish participation in organized crime in the’20s and’30s was finally confronted in the Jewish press, the “Jewish gangster movement” came to an end: “Reporting Jewish crime,” she points out, “led to Jewish respectability.”

Brown draws on Torah and Talmud to explain her attitude toward sin, repentance and redemption, and her analysis is often both profound and shocking.  She cites one passage of the Talmud, for example, to illustrate the “moral fragmentation” that sometimes accompanies the practice of religion — the passage depicts one priest stabbing another priest on the ramp to the sacred altar and addresses whether the knife is rendered ritually impure — and she uses it to make the point that “on closer examination of scandals in houses of worship and life as we know it, we frequently find moral vacuums in supposedly ethical people.”

This brings her to the volatile subject of abusive behavior by rabbis.  She considers, for example, the shattering experience of one woman who learned that her childhood rabbi had been charged with involvement in child pornography and pedophilia, something that ultimately led her to join a lay-led minyan, because she no longer trusted the rabbinate. Brown herself writes that “[t]he search for holiness, when it infuses our lives in its totality, becomes an irresistible force that brooks no entrance for immorality.”  But, of course, the whole point of her book is that there are many opportunities for immorality to enter any human life, even a rabbi’s life, and the real question is what to do when it happens.

Indeed, the touchstone of Brown’s book is the Yom Kippur liturgy, which invites us to engage in an annual public ritual of repentance.  But she warns against “teshuva-lite,” and she makes a distinction between forgiving and forgetting.  “Forgetting an act is impossible,” she insists. “Forgiving someone so that a relationship can continue to exist is possible and, from a Jewish perspective, both desirable and a moral responsibility.”  Above all, she calls on her readers to “make morality in the highest form of art.”

Although “Confronting Scandal” addresses some of the most challenging issues in Jewish life and Jewish religion, it is also lively, provocative and witty.  “It’s Judaism in the public oy!” cracks one of Brown’s acquaintances, and the quip captures perfectly what her compelling book is really all about.

Note: For the sake of full disclosure, I need to let my readers know that I have had business dealings with Jewish Lights, the publisher of “Confronting Scandal.”

Jonathan Kirsch, author and publishing attorney, is the book editor of The Jewish Journal. He can be reached at books@jewishjournal.com and blogs at

Mets’ owners slapped with Madoff ‘clawback’ lawsuit

The trustee for the Bernard Madoff estate has sued the owners of the New York Mets, claiming they should have known the money made with Madoff was done so nefariously. 

Irving Picard, the trustee charged with recovering billions of dollars in assets stolen in Madoff’s Ponzi scheme, has filed a so-called “clawback” lawsuit against Fred Wilpon and his brother-in-law Saul Katz seeking hundreds of millions of dollars, The New York Times reported.

The lawsuit, which targets more than 100 of the assets controlled by WIlpon and Katz, seeks the more than $300 million they allegedly made through Madoff’s scam.

The lawsuit will claim that they looked past red flags about the nature of Madoff’s investments, including concerns raised by officials at Merrill Lynch and one of their investing partners, the Times reported.

Wilpon reportedly said he will sell off up to 25 percent of the team because of the lawsuit.

Judge approves $7.2-billion Madoff settlement

The largest settlement to date in the Bernard Madoff multi-billion dollar Ponzi scandal has been approved by a U.S. judge today, the

Picower estate to return $7 billion made in Madoff scam

The estate of one of the largest beneficiaries of Bernard Madoff’s multibillion dollar Ponzi scheme, Jeffry Picower, has agreed to return $7 billion to Madoff’s victims.

The figure is the difference between the amount of cash that Picower, a Jewish investor, put into his account with Madoff and the amount that he withdrew, The New York Times reported. The deal was set to be announced at a news conference on Friday.

Picower, whose foundation gave to Jewish causes before it was wiped out by the revelation of Madoff’s fraud, was found dead of a heart attack in his swimming pool in October of 2009.

Irving Picard, the trustee for Madoff’s estate who is charged with recouping funds from those who made money on the scam, returning it to those who lost money with Madoff, has estimated that the total cash losses in the scam are about $20 billion. He has filed hundreds of so-called clawback lawsuits against those who made money and has reached significant settlements with others, including a $45 million settlement with Hadassah: The Women’s Zionist Organization of America, and a $625 million settlement with Boston-area Jewish philanthropist Carl Shapiro.

Including the reported Picower settlement, Picard will have recovered about half of what he estimates was stolen by Madoff.

Mark Madoff’s Name Became Too Big a Burden to Bear

Last Friday, the publisher of a promising real estate newsletter called Sonar Report rose before dawn, scoured the news to gather items for that day’s edition and, at 9:04 a.m., sent it out to his e-mail subscribers.

Unknown to almost all of his subscribers, that publisher was Mark David Madoff, the older son of the convicted swindler Bernard L. Madoff.

Less than 24 hours after sending his e-mail, he hanged himself in his downtown Manhattan apartment, leaving behind a life of burdens and blessings.

Read more at nytimes.com.

Winners, pay up! Madoff ‘clawback’ lawsuits going after Jewish groups, others

When Bernard Madoff’s multibillion-dollar Ponzi scheme first came to light two years ago, several Jewish organizations suffered heavy losses, their assets devastated by the fraud.

Now with the filing of lawsuits by the trustee for Madoff’s estate, it is the winners—the Jewish organizations that inadvertently benefited from the scheme—that are at risk of losing money.

Among them are:

* The America-Israel Cultural Foundation, which raises money to support artists and cultural institutions in Israel. The foundation, which allegedly made $6.68 million in fictitious profit between 2002 and 2008, is being sued for just over $5 million, according to the Chronicle of Philanthropy.

* The American Committee for Shaare Zedek Medical Center in Jerusalem, which is being sued for approximately $7 million, according to the Forward.

* United Congregations Mesorah, a nonprofit religious organization registered in Suffern, N.Y., and operated out of the offices of the Wolfson Group, according to the Forward. It is being sued for more than $16 million.

The biggest lawsuit, a claim of $19.6 billon, was filed against an Orthodox Jewish woman in Austria named Sonja Kohn. A housewife turned banker who was born in Vienna and resided in the Orthodox community of Monsey, N.Y., in the 1980s, Kohn is described as the biggest feeder of investor money into Madoff funds. She allegedly conspired with Madoff to lure investors, and reportedly withdrew some $423 million from Madoff’s fund just a month before Madoff was arrested in 2008. Representatives for Kohn have denied any wrongdoing.

Other Jewish institutions that benefited from the Ponzi scheme reached settlements with the Madoff estate’s trustee, Irving Picard, before the Dec. 11 deadline for filing the so-called clawback lawsuits. Picard filed more than 1,000 such lawsuits.

Hadassah: The Women’s Zionist Organization of America announced last week that it had agreed to pay back $45 million of the estimated $90 million it made in the scheme, according to a letter sent by the organization’s president, Nancy Falchuk, to supporters.

“Hadassah, like so many others, was misled,” she wrote. “Precisely because we were following a sound investment strategy, we realized more than we invested and will return some of the proceeds to be distributed to those who lost.”

Boston-area Jewish philanthropists Carl and Ruth Shapiro, who allegedly made more than $1 billion off their investments with Madoff, reportedly have agreed to pay back $625 million, which includes all the assets of their family foundation.

The agreement effectively wipes out the foundation, which had assets of $112 million in 2008, the last year for which data was available. The foundation had doled out annual seven-figure gifts to such Boston institutions as Brandeis University, the Beth Israel Deaconess Medical Center and Boston’s Museum of Fine Arts. Carl Shapiro is 97.

For now, many of the organizations targeted in the lawsuits are holding firm.

“AICF was and remains a victim of the fraud perpetrated by Bernard Madoff,” David Homan, the executive director of the America-Israel Cultural Foundation, said in a statement.

Homan denied any wrongdoing and called the lawsuit against his organization “unfortunate.” He also reportedly said that the foundation, which believed it had $13 million invested in Madoff’s fund, could seek a settlement. Homan did not return phone calls to JTA.

One of Madoff’s largest suppliers of investors in the United States was J. Ezra Merkin. The former chairman of the financial services giant GMAC, Merkin funneled some $2 billion of investors’ money to Madoff. Merkin is now the subject of multiple civil lawsuits brought by investors and the New York State attorney general.

In total, Picard has recovered about $2.6 billion through settlements. The lawsuits he filed this week seek more than $50 billion, a figure that is considerably higher than the $18 billion or so estimated lost in the scheme.

Among the lawsuits, Picard is seeking $6.5 billion from Madoff’s primary banker, JPMorgan Chase; $3.6 billion from the Fairfield Greenwich Group hedge fund; and $2.5 billion form the Swiss bank UBS AG, according to Reuters.

Picard also is suing for significant money from two Jewish philanthropists who were Madoff friends and beneficiaries but have died since the fraud came to light: $7.2 billion from the estate of Jeffry Picower, who died in October 2009, and $1.1 billion from the estate of Stanley Chais, who died in September. Both men had family foundations that gave to Jewish causes.

One of Madoff’s sons, Mark Madoff, who was believed to have been a target of Picard’s lawsuits but who maintained his innocence, committed suicide last weekend in his New York apartment.

The full extent of the damage that the recovery process will have on the nonprofit Jewish world will not be known until all of the lawsuits are settled. Even for those that already have reached a settlement, it’s not clear how the organizations’ activities will be affected.

“Hadassah’s fiscal discipline will allow it to pay this obligation from existing unrestricted funds,” Falchuk wrote to supporters about the $45 million settlement. “As always, Hadassah gifts will continue to be used for their intended purpose.”

The Madoff tragedy and personal legacy

As seen in The Jewish Week

With Mark Madoff’s suicide over the weekend, we witnessed the burden of a father’s sins. The Madoff Family’s tragic narrative reinforces why a person’s legacy truly matters. To expand on this teachable moment, JInsider looked to better understand personal legacy through the perspective of Jewish wisdom. (See full video discussions on www.jinsider.com)

Pride and Self-Worth
How do I want to be remembered? What do I want people to think about me? What do I want people to say about me? What do I want my children to remember? What do I want my grandchildren to remember? I’d like to be able to give them some pride in who I was. I may not be able to give them a great deal of money, but I may be able to give them a sense of pride that this was my father, this was my grandfather, this is what he stood for, and this is what he taught. And even though we cannot give them things, we can give them something that is more immortal than things. Things break. Things get lost. The legacy that has been handed down, that’s a part of me now, because I inherited that. Maybe I didn’t inherit it genetically but I inherited it as part of my history – and that’s who I am. So I think that a legacy is important because, yes we want to leave our children things, but we also want to leave our children a sense of self-esteem and self-worth.

Rabbi Dr Abraham J. Twerski is a noted psychiatrist and the author of more than 60 books. (www.abrahamtwerski.com)

Heavenly Court’s Question

There’s an unusual passage in the Talmud in which the rabbis speculate on what are the first questions the heavenly court asks us after we die and appear before it. I like to study this passage with people and ask them, “What do you think the rabbis would think are the first questions we are asked?” And people traditionally say, “Did you believe in God?” “Did you keep the Sabbath?” Or maybe, “Did you fast on Yom Kippur?” And they’re taken aback to learn that the first question is “Nasata V’Natata B’Emunah?” “Did you carry out your business affairs honestly?” The first proof of whether you lived a religious life is not how you act towards God, but how what you’ve learned about God influences how you act towards other people…. So that’s an important thing to keep in mind when we start trying to organize the priorities in our life. Obviously being a committed Jew and the keeping of Jewish laws are important, but what the rabbis view as central is the keeping of the law between people and honesty between people – so that when people meet you, people can assume you are the sort of person worthy of trust.

Joseph Telushkin, rabbi at the Synagogue for the Performing Arts in Los Angeles, is the author of 16 books, including Jewish Literacy, The Book of Jewish Values, and Hillel: If Not Now, When? (www.josephtelushkin.com)

Reputation with My Children
If I could get into my children’s heads – to see what they think about me – they are going to reference only a few areas in their lives. First, they are going to look at whether I loved them unconditionally. Was I really there for them? Did I make the time for them? Did I have experiences with them? Are there memories that were fun and loving and also memories that made claims on them and claims about what they should be in the world? Next is: Did I actually use my talents beyond my own family? Did I stretch? Did I cross any boundaries? Did I cross any borders? Did I do things with my own talent that ensured that I would also fail, for example? Or did I take the safe route all the way through my life? What did I really contribute?

Watch CBS News Videos Online

Rabbi Irwin Kula, author, media commentator and expert in Sacred Messiness and Partial Truths. (www.irwinkula.com)

Madoff trustee seeks $19.6 billion from Austrian banker

From NYTimes:

A prominent Austrian banker who portrayed herself for two years as one of Bernard L. Madoff’s biggest victims was accused on Friday of conspiring for 23 years to funnel more than $9 billion into his immense global Ponzi scheme.

The accusations were made in a civil lawsuit that sought damages of $19.6 billion — the sum of the cash lost in a fraud that wiped out nearly $65 billion in paper wealth and ruined thousands of investors on almost every rung of the economic ladder.

The central defendant in the complaint is Sonja Kohn, who was the hub of a complex network of European and Caribbean funds that channeled money to Mr. Madoff. A well-connected banker in her native Vienna, Ms. Kohn insisted she never suspected her trusted friend was running a global Ponzi scheme.

Read more at NYTimes.com.

Hadassah to pay back $45 million of Madoff gains

Tell-all book drags Hadassah back into Madoff story

Sheryl Weinstein, the high-profile victim of Bernard Madoff claiming to have had an affair with the confessed swindler, kicked off her book tour Tuesday with an appearance on ABC’s “Good Morning America.”

Why would a married woman, interviewer Chris Cuomo wanted to know, decide to write a book certain to cause a stir in her own personal life? Weinstein responded that as the person responsible for losing her family’s money with Madoff, she felt compelled to make things right by selling the only thing of value that she has: her story.

“When this happened, the feelings of guilt, responsibility, failure, became overwhelming. What went through my mind was, how am I going to get out of this? How am I going to make this situation better?” Weinstein said. “I knew it was going to be very hard on me. I was going to take a lot of the brunt. And I was willing to do that because the amount of responsibility was, and still is, really overwhelming.”

Weinstein was right to think that her decision to sell her story would land her smack in the center of the Madoff media circus. In the process, however, she also ended up dragging her former employer into the spotlight.

“I certainly hope Mrs. Weinstein was more discrete about her investment decisions on behalf of Hadassah than she was about her sex life,” Madoff’s attorney, Ira Sorkin, said in a statement broadcast to the ABC morning program’s 4 million viewers.

Weinstein, as virtually every media report on her new book makes clear, met Madoff and carried on an alleged 18-month affair with the investment guru during her tenure as Hadassah’s chief financial officer.

It’s not the sort of branding opportunity Hadassah officials were looking for, especially after months of promoting the message that the organization had moved beyond being a victim of Madoff’s Ponzi scheme.

Weinstein hasn’t worked at Hadassah for 12 years. And, on Tuesday, she reportedly told The Associated Press that she did not control investment decisions at the organization. Still,

Still, the book’s release has not only reopened questions about how the Jewish community’s largest membership organization ended up investing $40 million with Madoff (as Hadassah’s CFO, Weinstein reportedly was a member of the organization’s investment committee). It also has prompted media organizations to take a second look at the possibility that Hadassah and other charities potentially could be forced to return millions of dollars in profit that they withdrew over the years from their Madoff accounts.

At the time that Madoff’s scheme was exposed last year, Hadassah thought its account was worth $90 million, leading to initial reports about the losses suffered by the organization. But later it emerged that over the years Hadassah actually had withdrawn $130 million from its Madoff account.

Weinstein and Hadassah officials both have said that the first $7 million the organization invested with Madoff in 1988 came from a donor who insisted the money be handled that way. Hadassah had invested another $33 million with Madoff by 1996, a year before Weinstein left the organization.

When news of Weinstein’s book first broke, Hadassah officials were quick to insist that it was the first that they were hearing of the affair; the organization also stressed that there were many other members on the committee that decided to invest some of Hadassah’s money with Madoff.

“Hadassah was shocked to hear the news reports of Mrs. Weinstein’s personal admissions regarding this relationship. Indeed, we knew nothing of her relationship with Mr. Madoff until today, and her departure was unrelated to Mr. Madoff,” Hadassah’s president, Nancy Falchuk, said in a message sent to members of the organization’s board of directors.

Hadassah officials will not say why Weinstein left, but insist that it had nothing to do with Madoff.

The Chronicle of Philanthropy reported in 1998 that upon leaving Hadassah after nearly 14 years, Weinstein received $112,700 for 195 days of accrued vacation and $300,000 of severance. A Hadassah official was quoted as saying that the payments were part of “reaching an agreement” on her departure from the organization.

Efforts to reach Weinstein through her publisher were unsuccessful.

Hadassah insiders who asked not to be identified offered a mixed picture on the fund-raising fallout from the Madoff scandal. On the one hand there are loyal supporters who have rushed to support the organization. But there are also those dismayed at how Hadassah ended up investing with Madoff in the first place, and others who say they are reluctant to donate to an organization that could be forced to return money relating to its Madoff investments.

One insider said it is believed that no Hadassah board members were hit by Madoff, though some members of the organization—smaller donors who belonged to the country clubs in New York and Florida where Madoff poached—were wiped out.

It is too early to calculate with certainty whether Hadassah will suffer a significant drop in fund raising this year because of the fallout. But even if donations are down, with so many organizations experiencing a drop in support because of the economic climate, it would be difficult to prove a direct link to the publicity from the Weinstein tell-all. Officials at many nonprofits say they are assuming that many donors are simply hiding behind any excuse they can to avoid making donations.

Meanwhile, Falchuk (who also is a member of JTA’s board of directors) is highlighting several recent fund-raising successes and hammering home the message that Hadassah is moving beyond the Madoff scandal.

“As we near the end of August, Hadassah has received some good news,” she said in a recent message. “A new pledge of one million dollars, with two others in the pipeline, reflect the excitement, vitality and health of the organization. To date, over $213 million in gifts and pledges have supported our commitment to build the Sarah Wetsman Davidson Tower at the Hadassah Medical Center in Jerusalem, approaching our goal of $318 million without equipment.

“What a hopeful way to end the summer and begin the New Year,” Falchuk added. “In three years, 2012, Hadassah will celebrate our Centennial Anniversary and dedicate the new Tower in Jerusalem. We look forward to a vibrant future for the organization and continuing our good work into the next century—in Israel, America and around the world.”

Bernie Madoff Reportedly Dying of Cancer

From NYPost.com:

Madoff, who is serving 150 years at a North Carolina federal prison after pleading guilty to swindling more than $65 billion, has been telling fellow inmate he doesn’t have much longer to live.

“He’s been taking about 20 pills a day for his cancer,” one inmate told the newspaper. “He talks about it all the time. He’s not doing very well.”

Read the full story here.

The Real Madoff Scandal: Charitable Hoarding

Of all the shocks of the Bernie Madoff heist, perhaps none was more stunning than the list of victims. Among them were several Jewish foundations and many of our community’s most prominent nonprofits. The losses were staggering, and in some cases crippling.

Yet the real Madoff scandal isn’t the losses; it’s that our community was sitting on vast pools of accumulated wealth, much of it used to little effect. Madoff had his secrets to keep, but so, in fact, did many foundations and endowments. They had money to spend, and they didn’t spend it. Now it’s gone.

Everywhere in the Jewish community we hear of crises —in Jewish literacy and continuity, in a lack of social action and awareness, in a failure of the synagogue and the rabbinate and so on. Yet all this time, there were individual donors and philanthropy executives sitting on large pools of money that could theoretically have been used to help address many of our biggest concerns. As a community, we now live so much for perpetuity that we fail to deal with the present.

I used to think that the rise of Jewish endowments and foundations represented the pinnacle of our life here in America — financial success combined with organizational stability and careful foresight. Now, it appears, we are simply incompetent as a community, having so badly matched what we have with what we need. Either we refuse to deploy our assets to our needs, or our needs, as we define them, are in fact not that pressing. Either way, it is a stunning indictment.

Thanks to tax incentives that encourage their growth, philanthropic foundations have ballooned over the past decade. According to a report from New York’s Foundation Center, foundation assets doubled from $330 billion in 1997 to $669 billion only 10 years later. In their 2007 monograph, “A Study of Jewish Foundations,” Gary Tobin and Aryeh Weinberg note that Jewish foundations have experienced similarly rapid growth. (Full disclosure: Tobin has been a client of mine.)

Most foundations, however, do not spend the bulk of their money, instead storing it away, granting only a small portion to charities each year. “Most foundations with larger assets give away about 5 percent, the minimum required by federal law, which most foundations see as a ceiling, not a floor,” Tobin and Weinberg write.

Similarly, endowments, which also expanded with flush economic times, “rarely withdraw more than 5 percent or 6 percent of their assets per year,” as The Chronicle of Philanthropy reported.

True, endowments have their value. James Tisch, who has previously served as president of the UJA-Federation of New York, defends them strongly. “Endowments allow institutions to survive in bad years,” he told me. “Most organizations don’t have nearly enough after their annual campaigns to make it.”

I don’t disagree. There are many institutions that would close if not for their endowments, which most, thankfully, diversified.

But having an endowment of large enough size to do what Tisch describes is a double-edged sword. It does let you out of the annual campaign rat race. But it also removes your sense of urgency.

If Jewish donors were truly ambitious, they would demand philanthropic extinction. They would give money to organizations only if endowment funds were also put to work. They would launch foundations with a built-in ticking clock: Perform, or else. In short, they would operate as if Madoff were managing their money and that one day it would all be gone, anyway.

That model would involve more risk, more spending, more activity and certainly less for future generations. It would be akin to taking away trust funds from the grandchildren so they actually have to work for a living.

Fine. Jewish donors know that you don’t gain reward without some measure of risk. That’s true in philanthropy, just as it is in business. Yet many Jewish donors still give to the same old causes, the same old institutions, in the same old ways. No wonder so many got burned by Madoff. They followed the crowd on everything.

In Judaism, every 50th year is considered a jubilee year, when we are commanded to return land to its original owner and to let our fields lie fallow. Why not transpose that commandment to our endowments and foundations?

Let us resolve: Every 50 years, our community’s stored wealth must be spent, and its charitable assets depleted. After that, we can begin the work anew — yes, with fewer assets, but with a greater capacity for creativity and success.

Reprinted by permission of The Forward

Noam Neusner is the principal of Neusner Communications, LLC. He served as President George W. Bush’s principal economic and domestic policy speech writer from 2002 to 2004.

Surviving Madoff

On Tuesday came word that Bernard Madoff, accused of running the largest Ponzi scheme in history, would plead guilty to charges that would result in a life sentence.

That settles much, and settles nothing.

Still left unanswered are at least three questions: Where the $50 billion or so that he stole disappeared to; how many others, including his family members, were party to his crime; and how a Jewish community devastated by this heinous man can regroup and rebuild.

That last question occurred to me the other day as I sat in Café Tamar in Tel Aviv, across the table from a beautiful Israeli woman who alternated between tears, rage, and hope. 

Orit Naor directs the America-Israel Cultural Foundation in Israel. The foundation, charged with supporting artistic life in Israel, had invested its entire endowment, $14 million, with Bernard Madoff Securities.  It’s all gone.

A lot of major, high-profile charities, from Yeshiva University in New York to Hadassah in Israel to the Jewish Community Foundation in Los Angeles, lost money to Madoff. They will face some struggles and challenges going forward, but they will survive.

For smaller organizations like AICF, which operated under the radar of the larger Jewish community, the future is far from guaranteed, though their contribution to Jewish life may be no less critical. Talking with Naor, I got a sense of what it will take to survive Bernie Madoff.

“We’re 70 years old,” Naor said, “and we’re the best-kept secret.”

The AICF provides scholarships to young, promising Israeli artists, performers and institutions. Since the beginning of the Israeli state, every serious cultural institution has been connected through seed money and artistic support to the foundation: the Israel Philharmonic Orchestra, the Batsheva Dance Company, the Israel Museum, the Tel Aviv Museum.

For generations, the AICF has held intensely competitive auditions across the country, and rewarded the winners with the money critical to advance their artistic endeavors at home and abroad. The roster of those it has plucked from obscurity and funded is the pride of Israel — and the world: Pinchas Zukerman, Daniel Barenboim, Itzhak Perlman, Batsheva’s Ohad Naharin, Yefim Bronfman, Gil Shaham and recent Grammy-winner Hila Plitmann, among many others.

Naor speaks of AICF so passionately because she belongs on that list. She was a 13-year-old South American immigrant living in Beersheba when she played her flute before a panel of AICF judges. Their scholarship provided her with coaching, advice, prestige and $10,000 to travel abroad for international music competitions. Naor went on to a vibrant career as a professional flautist.

“The idea is to locate the best, those with the potential to become world-class professionals,” she said. “We create the next generation of Israeli performance artists, of cultural ambassadors to the world. Without AICF, I would have stayed in Beersheba. I would have been the best flautist in the Negev.”

Two years ago at a gala fundraiser in New York City, Pinchas Zukerman expressed much the same sentiment.

“I want everyone to know,” he told the crowd, “I wouldn’t be here without AICF.”

For much of its history, AICF was run by the virtuoso Isaac Stern and his wife, Vera. It was clubby and exclusive: Most of the money came through the Sterns’ rich and influential circle.

About 10 years ago, a donor put the foundation’s entire endowment with Madoff — a mistake, but certainly AICF was not alone in making it. For the last decade, the Madoff investment spun off enough interest so that — combined with about $1 million in annual contributions — the foundation was able to launch and support the careers of hundreds of Israeli artists and the institutions they depend upon, such as the Jerusalem Music Centre.

Then, on Dec. 11, Naor received a phone call from David Homan, AICF’s executive director in New York.  The money was all gone, Homan said.

“I felt like I had lost a member of my family,” Naor told me, her voice choking.

Some foundations and organizations have indeed closed down.  But Naor, Homan and AICF’s supporters couldn’t conceive of that.  Not only have generations of Israeli artists depended on AICF, but Israel itself has received incalculable benefit through its support for some of the finest artists and institutions in the world.

“Israel has a large stake in the culture we support,” Homan told me by phone, “as does the Jewish people.”

To survive, the organization first had to pare down. It reduced its overhead by 75 percent, laying off an associate director and a development director, among other measures. For the foreseeable future, it has had to cut back on some of its funding commitments. 

“Next year it will be not 700 scholarships but 100 to 200,” Naor said. “We need to rebuild.”

To rebuild, AICF is zeroing in on those things it does best, that aren’t replicated elsewhere in the Jewish world — for example, no other group provides the level of scholarships it does to promising Israeli artists. 

Finally, AICF realized it needs to do a better job getting its story out. In a post-Madoff world, clubby doesn’t work.  In fact, we’ve all learned that clubbiness was at the heart of Madoff’s evil yet masterful form of exploitation.

AICF’s three steps — reduce, focus, reach out — already have helped the foundation begin to bounce back.

Madoff or not, those steps also can be a wise model for any philanthropy to follow in these terrible economic times.

As for the man himself, Naor turns from tearful to tough.

“I can’t even think of the right punishment for him,” she told me. “The damage he did is more than financial. He ruined lives. I hope he stays in jail the rest of his life.”

Gaza, Madoff, Menschen and Muslims

Situation in Gaza

We call for an immediate cessation of hostilities in Gaza and Israel (“Gaza Outcomes,” Jan. 2). Hamas’ rocket attacks on Israel, chiefly aimed at civilians, are a gross violation of international law.

We recognize that the State of Israel has the right to defend itself. But the manner in which it has chosen to do so has been ill advised and morally questionable, causing considerable loss of life and grave damage (including educational and religious institutions) in Gaza. Hundreds of men, women and children in Gaza have been killed, thousands have been injured and infrastructural damage from air and ground assaults threatens the health and well-being of many more.

In light of this:

1 — We call on the State of Israel to cease its ground offensive and air attacks in Gaza, which have led to the loss of lives of innocent civilians without offering any prospect of political resolution to either Israelis or Palestinians.

2 — We call on Hamas to cease its rocket attacks on Israeli cities, which have no aim other than to inflict damage on innocent civilians and thus defy all norms of decency.

3 — We call on the leaders of the State of Israel and Hamas alike to pursue peace and to recognize that violence — provoked or not — will only beget more violence in the long run. The answer is not to be found in the militaristic reflexes that have been exercised to this point — reflexes grounded in a politics of honor, vengeance and reprisal. It is time to pursue other avenues to reconciliation. It is our hope that after the immediate cessation of hostilities, serious resources and political access be placed in the hands of those with the will and ability to affect real diplomatic progress in resolving the conflict.

4 — We call on all sides in the conflict to abide by international law and to protect the human rights of all persons involved — civilian and military.

5 — Finally, we call on the United States, and especially President-elect Barack Obama, to assume a leading role in pushing the warring parties beyond the cycle of violence and bloodletting. All concerned Americans, Jewish and non-Jewish, should urge the current and new administrations to discard the past eight years of neglect and mobilize American policy toward a diplomatic resolution of the Gaza — and larger Israeli-Palestinian — conflicts. The time for action is now.

In the Jewish tradition, all human beings are created in the image of God. We do not discriminate between Jews and Arabs when violence is directed against innocents; we mourn the loss of life on both sides.

Please join us in calling for an end to the violence and a more active American engagement in the current crisis.

Rabbi Leonard Beerman
Sarah Benor
Ra’anan Boustan
Gerald Bubis
Aryeh Cohen
Bernard Friedman
Sharon Gillerman
Rabbi Joshua Levine Grater
Rabbi Steven Jacobs
Baruch Link
Douglas Mirell
David N. Myers
Stephen Rohde
Adam Rubin
Rabbi Chaim Seidler-Feller
Arthur P. Stern
Nomi Stolzenberg
Roger Waldinger


The Journal reported on an early screening of the movie “Defiance” for an audience of Anti-Defamation League delegates (“Zwick’s ‘Defiance’ Brings Heroes of Jewish Anti-Nazi Resistance to Screen,” Nov. 21).

After the screening, national ADL Director Abraham Foxman said he was unsure how “Defiance” would be received by Jewish viewers. He said, “I am not certain whether we are ready to embrace fighting Jews.”

I was appalled at that comment. Tuvia Bielski, the leader of the Bielski Brigade, played by Daniel Craig in the movie, was my former father-in-law.

I was married to Bielski’s daughter for over 17 years and have two children from that marriage. During that time, I learned that this seemingly unassuming man was actually a great hero, as many of the surviving partisans would visit his family in their small Brooklyn apartment. They would tell stories of their harsh life in the woods.

I came to realize that none of those partisans would be alive, and I would not have two wonderful children today, Bielski’s grandchildren, if it wasn’t for those “fighting Jews.”

The Bielski family had been trying for years to publicize the exploits of the Bielski Brigade to show the world that not all Jews went to their deaths without a fight. Finally, director Ed Zwick took a chance to make this film showing fighting Jews we can all be proud of.

Larry Rennert
Long Beach

Honorable Menschen

All of your mensches are very special people (“Mensches,” Jan. 2). But one of them brought a lump to my throat and tears to my eyes.

Andrew Wolfberg is a special, special person. Wolfberg taking the challenge of the 8-year-old boy with cerebral palsy is such a beautiful act of kindness, caring and tenderness that there are no words to describe the humanity Wolfberg gave to this special young boy.

In these days of the Bernie Madoffs, et al, Wolfberg is a very large breath of fresh air.

Harvey M. Piccus

The Madoff Effect

The Jewish Community has become despondent at a time when we need to take action (“Charitable Boards Face Criticism Post-Madoff,” Jan. 2). Yes, there has been a lot of bad news — tough economic times, the Madoff scandal and concern about Israel’s security. But every single day in our community, there are also thousands of quiet heroes performing their miracles, large and small.

Whether visiting an ailing Holocaust survivor at home, volunteering at SOVA and providing nourishing groceries to those who are hungry, counseling spouses and children who suffer from violence in the home or assisting seniors to find proper health care and other vital services, the philanthropic fabric of our community changes lives for the better every day.

We save lives. Don’t lose hope, and don’t give up on our mission of tikkun olam (repairing the world). At the turn of this New Year, we will be the solution to the challenges our community faces.

It is time for all of us to renew our commitment to the community by becoming active again, giving of our time and donating money to worthy causes.

Jeff Nagler
Jewish Family Service of Los Angeles

Consulate Protests

I believe there are several times as many Jews as Muslims in Los Angeles (Jewishjournal.com video, Dec. 31). Why do they outnumber us badly in each demonstration? Are all the Jews too busy to stand up and be counted on the evening news? Sick!

Louis Richter

Web Editor’s Note: We have a constantly-updated list of rallies and other ways to support Israel online here

Public Schools

Jewish day school didn’t seem like a viable option for my family two years ago when we were considering elementary schools for our then pre-kindergartner (“Can Recession Fuel Return to Public Schools?” Dec. 26, and “Keeping Middle-Income Families in Jewish Schools,” Dec. 19 ).

Our family income is far less than the so-called “middle-class” earnings of $276,000 that Julie Gruenbaum Fax says is required in order to afford Jewish private school for two children. I’d hardly consider that a middle-class income, even in Los Angeles.

Truly middle-class families are not able to afford private school of any sort, and yes, we are compelled to find the best public schools we can and make the best of it.

I agree strongly with Bill Boyarsky that the Los Angeles Unified School District is an oft-maligned system that actually does offer some excellent schools with dedicated teachers and principals.

At our daughter’s public elementary in Venice, there are plenty of other Jewish kids, but few who attend Hebrew school, mostly because they don’t know where the good ones are.

Where are the good Hebrew schools and youth programs? Why can’t I find a Jewish day camp on the Westside? Will they feel alienated at summer camp if they never attended Jewish day school? What if you don’t live in the Valley, Brentwood or Pico-Robertson?

My challenge is how do I provide a Jewish education for kids in public school. I’m open to suggestions.

Rachel Panush
via e-mail

Howard Blume

The “Q&A With Howard Blume” (Dec. 19) presented two points of interest for our community at Temple Isaiah. First, savvy parents can secure a high-quality public education through magnets, charters or SAS programs; second, parents feel they can’t choose their neighborhood schools.

At Temple Isaiah, we believe that a good public education is every child’s right.

Over the last year, in partnership with One LA-IAF, Temple Isaiah has engaged in a process of congregation-based community organizing.

We’ve recently started to work with Emerson Middle School. Our hope is to build relationships among parents, teachers, local businesses and faith-based organizations — all committed to the success of the neighborhood school.

But our cause is broader than the Westside. We recognize that the capacity to change on the local level can lead to change citywide. If we can stabilize one school, we are helping to stabilize the Los Angeles Unified School District and moving toward ensuring a good public school for every child. If we strengthen one school, we can be teachers and models for other communities.

Rabbi Dara Frimmer
Temple Isaiah

Death of Dr. David Lieber

May it give his wife, children and grandchildren some measure of peace to know that their husband, father and grandfather has left an enduring legacy to so many people (“Dr. David Leo Lieber Z”L: To Know Him Was a Privilege,” Dec. 26).

I know I am not alone when I say Dr. Lieber will always be remembered with great love and fondness. I am only one of his former students who were so grateful to have known the teacher and the man. May his memory be for a blessing.


Bella Szkolnik Kapp
Los Angeles

Once in a lifetime

I don’t know about you, but I’ve had it up to here with once-in-a-lifetime events.

Katrina was once in a lifetime. The 2004 tsunami was once in a lifetime. This past year’s wildfires were the worst blazes in living memory. Every other month seems to bring an epic rain or snow that is said to be the storm of the century. And don’t get me started on the polar ice cap.

George W. Bush, the worst president in American history, will turn out to be, God willing, once in a lifetime, as will the officially sanctioned use of torture by American interrogators, the subjugation of the Justice Department by a bunch of right-wing 20-something hacks, and the grotesque intervention of Congress into the Terry Schiavo case. If Dick Cheney isn’t once in a lifetime, there is reason to doubt the existence of divine mercy.

The depth of the unfolding recession, for those who did not experience the Great Depression, is now forecast to be once in a lifetime. Bernie Madoff’s breathtaking Ponzi scheme is — one can only hope — once in a lifetime. The demise of Lehman Brothers, founded in 1850, is once in a lifetime, as will be the extinction of Levitz, the 97-year-old furniture chain, and (as is plausible) of Dodge (b. 1914) and Kmart (b. 1962).

Until this recession, India and China were poised to overtake the U.S. economy, which would surely constitute a once-in-a-lifetime development, like the fall of communism, tobacco, butter, girdles and Esperanto.

The impending deaths of the print newspaper, the network evening news and the television networks themselves — like the prior deaths of the buggy, vaudeville and silent movies — are bound to be experienced as once in a lifetime. The demises of slide rules, typewriters, Polaroid instant cameras and VHS tapes each marked the end of an era. TV Guide is going the route of Colliers, The Saturday Evening Post, Look and Life; when either Time or Newsweek folds, its surviving competitor will doubtless send it off with a once-in-a-lifetime obit.

Sept. 11 was once in a lifetime, unless you lived through Pearl Harbor. It is wishful thinking to imagine that the malicious explosion of a nuclear device is not in the world’s foreseeable future, and if, keinahora, that happens, it will surely be labeled — optimistically — once in a lifetime.

On the upside, the election of a black American president is totally without precedent, and it is not inconceivable that a woman will eventually follow him to the White House, though if it’s Sarah Palin, she stands a decent chance of wresting worst-ever laurels from Bush.

My discomfort at being crowded by this surfeit of once-in-a-lifetime happenings is partly about hype, and mostly about mental hygiene.

The mainstream news media have no vested interest in proportionality. With so many things competing for our attention, the only way for media-owning corporations to capture our eyeballs is to inflate everything to Armageddon dimensions. Every lurid local crime becomes a national melodrama; every flare-up on the planet is depicted as a precursor to World War III; every scandal is Watergate, or something-else-gate. We are inundated with the Ten Worst This and Ten Best That, while long-simmering atrocities truly deserving of notice, like Darfur or the tuberculosis pandemic, barely make it onto the radar screen.

No wonder the world has the jitters. We are daily assaulted by so much hyperbole that it is nearly impossible to know what is important any more. It is undeniable that we live in a time of big change, but if we did not also live in a time of big media, I am not convinced that we would experience our lives as a relentless onslaught of cliffhangers, crises and catastrophes.

To every thing, Ecclesiastes tells us, there is a season, but you wouldn’t know it from the media, which know only one season, which is BREAKING NEWS. Real life has natural rhythms; it plays out on many stages, from the personal and private to the public and historical. But the culture of THIS JUST IN homogenizes those differences. Its imperative is to monetize our attention, and the easiest way to do that is to see as much as possible through once-in-a-lifetime lenses.

I don’t mean to diminish the pain of the economic meltdown, or the significance of climate change, or the symbolic breakthrough of the Obama inauguration or the dizzying transformations being wrought by technology. But it does no good for us as citizens if everything is as screamingly urgent as everything else, and it does no good for us as people if our nervous systems are constantly being bombarded by superlatives. How can our leaders set priorities, how will we ever agree on trade-offs, if public discourse only consists of capital letters? How can we linger in the intimacies and mysteries of existence, how will we truly know what’s worth caring about, if shock and rupture is the only language our culture knows how to speak?

Marty Kaplan is the Norman Lear professor of entertainment, media and society at the USC Annenberg School for Communication. His column appears here weekly. He can be reached at martyk@jewishjournal.com.

The fault lies in our stars — stars like Bernie Madoff

Holiday Cover

I was not totally surprised by The Journal’s holiday cover showing a guy dressed in a red sweater and tartan pants (“True Confessions of a Real Jew,” Dec. 19). Festooned in golden glitter, he held a stick of candy cane in one hand and a quart of eggnog, complete with holly sprigs, in the other. At his feet were a gift bag, decorated with a snowman, and a wooden toy soldier.

I searched high and low for some sign of Chanukah — this being The Jewish Journal and all — but to no avail until I refocused on the carton of Alta Dena eggnog, which I figured had to be kosher. It warmed my heart when, with the aid of a magnifier, the indecipherable smudge, which I guessed to be a KD symbol, shone forth in all its glory.

Some people might think that you would never find a Jewish symbol on The Journal cover on a Jewish holiday, but they would be wrong. You could say that a very small miracle happened here. Hag Sameach, Happy Chanukah.

Bob Kirk
via e-mail

Madoff Madness

Marvin Schotland, Jewish Community Foundation president and CEO, tells your reporter that in reviewing the Madoff investment they employed “the same caution they use for each of the JCF’s investments” (“Financial Tsunami,” Dec. 26).

Since by all reports Bernard L. Madoff provided prospective and continuing investors with minimal information as to his strategy or operations and that the accounting for his multibillion-dollar money management operation was being handled by a two-man firm operating out of a minimall in Rockland County, N.Y., I find Schotland’s statement shocking and actually scary.

Jonathan Davidson
Valley Village

A shonda, a disgrace, a sin (“The Four Big Madoff Questions,” Dec. 26). The Jewish community is horrified that one of theirs would swindle and deceive not just his fellow Jew but charities.

Unfortunately, the Bernie Madoffs, the Ezri Namvars and the Ron Barnesses of this world are in danger of becoming scapegoats for the lack of our own personal accountability. None of them have been convicted of any wrongdoing; all are defendants in civil lawsuits accused of dishonesty.

All are Jews who traded on their religion for money. They sought trust by becoming notorious philanthropists for Jewish causes. And now we are outraged.

We must not let that outrage eclipse our own personal responsibility. We glorify money; too often we choose “Men/Women of the Year” and honorees on the basis, not of individual merit, but on the size of their contributions and the worth of their Rolodexes (how much money they can raise from others).

Why are we then shocked when the very basis of our trust, money, is exposed as false, as it was with Madoff, Namvar and Barness?

And whom can we blame other than ourselves for not making the effort to act prudently, especially when we are investing trust monies? Instead of blaming only others — the SEC, the financial planners, the trusted icons — we need ask ourselves, why didn’t we take the time to do our own homework and to ask the unspoken question?

We should not fool ourselves and simply blame the Madoffs, the Namvars and the Barnesses for their reported ethical bankruptcy, when we paved the road for them by glorifying their wealth and not their merit.

Louis Lipofsky
Beverly Hills

Far be it for me to wish any more harm on the wonderful institutions that lost significant money in the Madoff tragedy, but one has to openly wonder how and why in the world several of our charitable organizations need to squirrel away tens of millions of dollars in invested endowment money (“Jewish Money,” Dec. 26).

Yeshiva University loses $140 million, Hadassah loses $90 million, Technion loses $70 million. Yet there are countless superior Jewish social service agencies both here and in Israel taking care of the poor, the hungry, children at risk, the disabled, the elderly, etc., who don’t know from where their next quarterly operating expenses will be coming.

I urge you and the Jewish community at large to take a closer look at this startling inequity. Do these institutions have a right to sit on all this money?

Richard Cohen
Manhattan, N.Y.

Some of Hollywood’s biggest names have had the misfortune of finding out that money they had invested with Bernie Madoff has vanished (“Jewish Money,” Dec. 26).

Steven Spielberg and Jeffrey Katzenberg of DreamWorks fame may have lost millions in Madoff’s alleged Ponzi scheme, according to The Wall Street Journal.

Spielberg and Katzenberg’s Wunderkinder Foundation had investments with Madoff that were made on the two celebrities’ behalf by their business manager.

Eric Roth, who wrote the screenplay for “Forrest Gump” and recently received a Golden Globe nomination as screenwriter of “The Curious Case of Benjamin Button,” lost all of his retirement money.

Madoff, who was once the chairman of NASDAQ, helped the upstart stock-trading facility rise to become a respected alternative to the New York Stock Exchange.

When it came to the methods that his now-defunct investment firm used to achieve unusually consistent returns, Madoff was quite secretive. Reports sent to investors by him only disclosed general strategies, such as using stock options to take advantage of market volatility.

Now the mystery is beginning to be revealed. Madoff was paying existing investors with money from new investors. When the credit crunch hit, things swiftly fell apart.

At the time, if Madoff were managing your money, you had bragging rights. That’s how hot he was. Sources indicate that plenty of other entertainment industry figures have lost big time in the alleged scam.

Hollywood is unique, even in the financial sense. This is partly because there’s a fame meter that operates, and residents are all tuned in. A continuous internal read is taking place, and externals are used to project one’s measure.

How much fame does one possess? Stars consciously and subconsciously assess each other’s scores and respond accordingly.

Madoff’s score was super high, the result of his own eventual level of investment celebrity.

Like a Ponzi scheme, though, fame had been artificially multiplied for Madoff, which he used to gain more Hollywood clients and so on. When the bottom fell out, the fame itself changed character.

As circumstances unfold, Madoff’s score on the fame meter may still remain high, but it won’t be a measure he’ll feel proud of.

Brian J. Goldenfeld
Woodland Hills

Navy Rabbi

Thanks for the article about Rabbi Jon Cutler in Iraq in “Troops Can Practice Their Faith, Thanks to Navy Rabbi” (Dec. 26). I performed in Iraq last May and ended up at Camp Al Assad right before Shabbat. I met Rabbi Cutler and not only did he give me a challah for Shabbat, but everyone at the Friday night service came to the show the following Saturday night, and they were a great audience.

(I also dropped off a large delivery of kosher meat from Jeff’s Gourmet.)

After the show, the first thing I did was go back to Rodef Shalom (Chasing Peace), the synagogue Rabbi Cutler established, and did Havdallah. It is something I will never forget.

Avi Liberman
via e-mail

Return to Public Schools

Having worked for the current principals of both Emerson and Webster middle schools, I’ve nothing but praise for their skills and acumen (“Can Recession Fuel Return to Public Schools?” Dec. 26). Nonetheless, there’s little hope that their failing schools will achieve excellence in the current environment.

For administrators to succeed, they must have the authority to meet their responsibilities. Unfortunately in the Los Angeles Unified School District, it is the powerful teachers union that rules the roost. The union has successfully blocked every meaningful reform and continues to protect incompetent teachers.

The union opposes the breakup of the behemoth LAUSD, opposes charter schools, opposes standardized testing and opposes school vouchers. Competition strikes fear in the heart of the union hierarchy.

If the day ever arrived when parents could freely choose their child’s school without being concerned about the financial implications, the exodus from the LAUSD would cause a stampede.

Leonard M. Solomon
Los Angeles


I commend The Jewish Journal for its insightful analysis of the Mumbai massacre (“Mumbai Attacks Bring New Security Challenges,” Dec. 5). That event was indeed al-Qaeda’s follow-up to 9/11.

I know President Bush is not very popular these days, but it took al-Qaeda nearly eight years to get its act together after 9/11, and surely President Bush’s efforts in Iraq, Afghanistan and here in America had a lot to do with that.

I trust the significance of the Mumbai massacre will not be lost on President-elect Barack Obama. The Muslim war against the West is obviously gaining momentum even as we speak and hardly seems something that mere reasonable discussion can deal with.

I would suggest Obama signal that he will hold countries that fail to aggressively challenge the presence of terrorists in their territory fully responsible for Mumbai-type outrages.

Brian J. Goldenfeld
Woodland Hills

Creditors force Ezri Namvar into involuntary bankruptcy

Businessman and philanthropist Ezri Namvar was once a pillar of the local Iranian Jewish community, a trusted friend to whom many in the community loaned freely and without fear.

Now Namvar and his investment company, Namco Capital Group, Inc., are accused of losing as much as $400 million loaned to him.

For the last three months, lawsuits have been filed and extensive negotiations have been taking place to resolve the hundreds of millions of dollars in disputes between Namvar’s creditors and the Brentwood Iranian Jewish businessman. On Dec. 22, two dozen creditors filed an involuntary bankruptcy petition against Namvar and Namco.

The petition follows 17 lawsuits filed against Namvar, Namco, entities owned by Namvar and other Namvar family members alleging breach of contract and contractual fraud in a case that attorneys estimate involves 300 to 400 creditors, the majority of whom are Iranian Jews.

“Disputes happen all the time, but the magnitude of this case is huge,” said A. David Youssefyeh, a local Iranian Jewish attorney who is advising nearly 20 Iranian Jewish creditors in this case, of whom only a small group participated in the filing of the petition. “This case hits people in the community from such a broad socio-economic level — it includes everyone, from students that had entrusted Mr. Namvar with their bar mitzvah money, to retired people who invested their entire life savings in Namco and were paying their living expenses from the interest they received from the company.”

The creditors include investors in Namco Capital Group, those who lent money to Namco and received a personal guarantee from Namvar, lenders to Namco who received a lien on property owed by Namvar or one his entities and those who gave profits from their real estate transactions (1031 funds) to Namvar, according to the lawsuits.

“For 1031 money, the IRS will allow delayed payment of taxes on profits people give to a facilitator, such as Mr. Namvar, to hold for them until they find a substitute property to purchase,” Youssefyeh said. “But now that that money is gone, the people that entrusted Mr. Namvar with the money may potentially have to pay taxes on monies that they don’t have.”

Problems first arose nearly five months ago, when various creditors discovered they were unable to retrieve funds they had invested in Namco or given to Namvar, and that they were also no longer receiving interest payments from monies invested his company, Youssefyeh said.

While some community members filed suits to regain their money, the majority hoped instead to resolve the issue outside of the courts, in the traditional manner of the tight-knit community.

“Back in Iran, whenever a businessman in the Jewish community was unable to pay his creditors, the community leaders would get together and devise a plan to help the businessman get back on his feet financially so that he could repay those debts,” said Ebrahim Yahid, a community activist in his 80s who is a close friend of the Namvar family.

Indeed, such a group was organized after a meeting on Nov. 5 between Namvar and Namco’s Iranian Jewish creditors, according to a statement released to The Jewish Journal by the group on Dec. 16. Namco’s creditors first nominated and then voted to create a provisional committee, including prominent, independent community members. The group planned to trace all of Namvar’s assets and propose solutions to the creditors, according to the statement.

The all-volunteer committee included retired banker and former president of the Iranian American Jewish Federation (IAJF) Solomon Agahi and former IAJF Secretary General Sam Kermanian, as well as businessmen Jack Rochel and Nejat Sarshar. They had their first meeting on Nov. 24, according to the statement, and they were offered full authority by Namvar to resolve the disputes. The committee also hired an independent forensic accountant and attorney.

Nevertheless, talks broke down, and Youssefyeh said he advised his clients to file the bankruptcy petition when his negotiations with the local Iranian Jewish community leaders and Namco’s attorney failed to secure a deal to retrieve their investments for his clients and the nearly 200 other local Iranian Jewish creditors.

Youssefyeh said he became frustrated because Namvar’s paybacks seemed designed to protect the wealthy creditors, rather than the small investors whose life savings had been jeopardized. “What particularly made me mad was that with the $12 [million] to $13 million, Mr. Namvar could pay off 190 people, most of which needed the money for their survival, that had entrusted Mr. Namvar with $200,000 or less,” Youssefyeh said. “But people close to him told me that instead of Mr .Namvar paying off these creditors, Mr. Namvar had earmarked the remaining $17 million that he would receive from the sale of his Wilshire Bundy Plaza building to pay his 1031 obligations first, in order to avoid any potential liability arising from the 1031 funds not being available to the investors.”

Youssefyeh said bankruptcy was the only available option to protect his clients, because it allows the courts to distribute Namvar’s assets and even reverses settlement payments Namvar had made to his more affluent creditors, who have the financial means to proceed with litigation against him.

According to the bankruptcy petition, filed in U.S. Federal Bankruptcy Court in downtown Los Angeles, the dozen creditors include both Iranian Jews and non-Jews, with more than $7 million in claims against Namco Capital Group and $7 million in personal claims against Namvar.

While members of the provisional committee declined to comment on the filing, legal experts said the petition nullifies the committee’s ability to settle the case, giving the courts the responsibility of distributing Namvar and Namco’s assets.

Some community leaders, who asked not to be identified, argued that the bankruptcy petition could hurt the community’s numerous creditors, because they might never receive their money back, since the case could take years to litigate and any available monies could be eaten up by attorneys’ fees as well as other costs.

Youssefyeh defended the bankruptcy petition. “The [provisional] committee had not taken any steps to take control of Mr. Namvar’s assets and in so many words said that they were not qualified to disperse his assets,” he said, adding, “yes, it will be painful and take a long time, but at the end of the day there was no other viable solution that would have frozen the assets, brought all of the preferential transfers and securitization money back into the pot.”

Local Iranian Jews had been investing with Namvar and Namco since the late 1990s. The relationships were based on his family’s reputation for being honorable as well as his success in real estate development, Yahid said.

Some have compared Namvar’s situation to the Bernard Madoff scandal, which involves a Ponzi scheme, but this is unfair, according to Namvar’s friends and community supporters, who say Namvar’s losses are due simply to the economic downturn.

“I know he [Namvar] did not have bad intentions — the economy around the whole world has gone downward, including the real estate market here in Los Angeles, and everyone is hurting, including himself,” Yahid said. “If he really had bad intentions, he would not have welcomed the committee to resolve this case, but would have instead declared immediate bankruptcy himself and destroyed the lives of hundreds in our community.”

Madoff, Christmas, Chanukah and Hebron

A Very Jewish Christmas

I fully enjoyed Elon Gold’s story, “Don’t Feel Bad! I Love Christmas, Too!” (Dec. 19). He left out that Christmas is the one time a year when millions of people worldwide celebrate the birth of a Jew.

Jason Levi

Chanukah Cover

The Chanukah cover (Dec. 19) is outrageous. Is that the best you can do a few days before our glorious Jewish holiday, Chanukah? Granted, Christmas is very important for Christians, celebrated by the gentile world only one day. This year, it falls in the middle of Chanukah, which is celebrated by Jews for eight days.

Would it not have been appropriate to have Jewish symbols on the same cover, such as a menorah, dreidles, Chanukah candles, candies, latkes, sufganyot, etc., marking our holiday? After all, it says it is “The Jewish Journal” — it is not a Christian paper, or is it? Are we not proud of our traditions of Chanukah celebrations?

Bernard Nichols
Los Angeles

Complete Madoff CoverageMadoff

The victims of the Bernard Madoff scam are guilty of one of the oldest sins in investing (“Madoff Scandal Rocks Jewish Philanthropic World,” Dec. 19). They wanted what everyone looks for and doesn’t exist: equitylike returns without equity risk.

Shame on the board members of the charities that were duped by Madoff, and double shame on the consultants and advisers the boards hired to guide them — they definitely should have known better. Once again, we learn the hard way that if someone promises you stock market returns without stock market risk, run don’t walk away — they’re either lying or incompetent. Shangri-La does not exist.

Robert Raede
Santa Barbara

The Jewish Community has a golden opportunity to use this misguided glaring spotlight on Bernard Madoff and his Jewishness to show that the Jewish community will do the counterintuitive thing, the right thing: Instead of throwing Madoff under the bus, the Jewish community must visibly ensure that Madoff receives a fair, unbiased trial; the Jewish community must visibly provide any religious and spiritual support and guidance Madoff needs, including spiritual and religious rehabilitation.

This should be done in spite of the fact that many Jewish institutions are his alleged victims. Our collective Jewish history is filled with cases of Jews that have been unfairly punished by the state because they were Jewish. Now that the Jewish community is in a spotlight it did not ask for, it must unequivocally show the world that as a group, it will never stray from its mandated justice and compassion, however painful.

Anything less would be playing into the hands of the Jew-haters and the self-hating Jews.

Martini H. Leaf
via e-mail

I am so proud of Rob Eshman (“Madoff,” Dec. 19). His condemnation of Bernard Madoff flies in the faces of those many Jews who believe in the lunacy that Jews can do no wrong. I believe we will become better if Rob, and others like him, continue to have the courage to expose the reality of our Jewish people, warts and all.

Martin J. Weisman
Westlake Village

Several things bother me about Rob Eshman’s column about Bernard Madoff. As a retired criminal defense attorney, I find journalists who write or speak about Madoff without interjecting the caveat, “if he is guilty,” doing a disfavor to our judicial system that gives the presumption of innocence to all those accused of a crime.

However, the most disturbing thing Eshman wrote is, “What kind of world is it where Jews can’t trust fellow Jews?” To which I reply as a member of the human race, “What kind of a world is it where human beings can’t trust fellow human beings?”

I guess the answer to both our questions is, “It’s hell.”

Leon M. Salter
Los Angeles

A Pardon for Michael Milken

How ironic the same issue of The Jewish Journal that details the securities fraud of Bernard Madoff should have a column calling for a pardon for Michael Milken (“Bush Should Grant Michael Milken a Pardon,” Dec. 19). Milken went to jail for a reason and came out with enough money to buy his way back into the good graces of the Jewish community.

The organizations that honor him and put his name on buildings and projects that do good deeds forget the pain of those of us who lost money trusting him. The Madoff scandal reminds us that a crook doesn’t always carry a gun when he robs you.

Damage inflicted by white collar criminals endures. Milken should do good deeds for the rest of his life. He hurt a lot of people. He does not deserve a pardon.

Karen Heller Mason
Los Angeles

Dean Rotbart’s opinion in The Jewish Journal is that Bush should grant Michael Milken a pardon because he is a “tzadik.” The talmudic question is, “Is dirty money really tzedakah?” President Bush, a righteous man, what should he do?

Phil Bauman
Morro Bay

You want to write about President Bush righting a wrong (by way of a presidential pardon) before he leaves office for the final time, how about writing on behalf of a fellow Yid who is actually rotting away in jail and really does need our help (yes — we’re all sinners when it comes to our neglect in helping free Jonathan Pollard).

In case Messrs. Rotbart and Eshman aren’t aware, the median sentence for the offense Pollard committed — one count of passing classified information to an ally — is two to four years. Pollard has been rotting in jail now for 24 years under a life sentence without parole.

Pollard deserves a write-up for a presidential pardon more than Michael Milken ever will.

Shame on The Journal and Rotbart for wasting precious opinion space on such silly nonsense.

Daniel E. Goodman
Valley Village

Singles Column

For many weeks I have enjoyed Amy Klein’s “True Confessions.” It is hysterical reading the woman’s perspective and constantly reminds me of past dates I’ve been on — unfortunately.

Thanks for finding a place in The Journal for my weekly laughs. I hear the piece is coming to an end, and I thought I would put in a plug and let you know how much I have enjoyed it. If there were any possibility, I would love if you could continue printing my favorite comic strip.

Kenny Melcombe
via e-mail

Museum of Tolerance

The Wiesenthal Center plans to build a Center for Human Dignity by committing egregious acts of indignity and intolerance (“Protests Over Jerusalem Museum of Tolerance Spread,” Dec. 12). The point that the land is no longer designated as a cemetery by Israel is irrelevant and is not what is at issue here. There are still hundreds of Muslims buried on that land, and they do not deserve to have their final resting place be desecrated.

More than 150 skeletons were unearthed under the Wiesenthal Center’s supervision. It is our responsibility, as Jewish and Muslim people who understand extending respect toward sacred places and religious symbols, to ensure that the Simon Wiesenthal Center does not move forward with these plans.

Asmaa Ahmed

Building a structure of any kind, especially a Museum of Tolerance, over a Muslim cemetery, is like waving red flags in front of bulls. What, they don’t have enough reasons to hate us?

Sandy Savett
Santa Monica

This is to urge the Simon Wiesenthal Center to halt the building of a Museum of Tolerance over the Mamilla Cemetery in Jerusalem. Building a Museum of Tolerance atop the cemetery, unlike the admirable goal of furthering tolerance and understanding (as the Museum of Tolerance has done in the past), will only add to the existing pain and suffering of Palestinians and Israelis, irreversibly damage relations between Muslims and Jews worldwide and sow new feelings of animosity and division for generations to come. Is it worth the extra pain?

Dr. Murtadha A. Khakoo,
Chair, Department of Physics,
Cal State Fullerton

Please halt building over the Mamilla cemetery in Jerusalem.

Greg Abdullah Ali

Violence in Hebron

In your coverage of the eviction of Jews from Hebron’s Beit Hashalom, a house whose purchase by an American Jew is currently being disputed in court, you asserted that the Israeli Supreme Court ordered the eviction and that the eviction was thus carried out pursuant to such an order (“Unchecked Settler Violence Sparks Fears of New Intifada,” Dec. 12). That is incorrect and misleading.

The Supreme Court did not order the eviction of the inhabitants of Beit Hashalom and, as such, the eviction did not take place pursuant to an effort to enforce such a ruling. Rather, as former Israeli Supreme Court Justice Yaakov Turkel said, “The ruling does not obligate the state to act to evacuate the Jews, but rather gives them the freedom to decide whether to do so or not.”

It was precisely that discretion — not an order — authorized by the court that led some 50 Knesset members to ask the government not to evict the Hebron Jews. The signatories included the chairpersons of seven Knesset parties, including Kadima and Likud, and several former ministers.

The Knesset members wrote, “The Supreme Court … did not obligate the government to evict them.” They also said, “It seems the settlers have serious evidence to prove their claims [of legal purchase] … in light of the new evidence presented … to the prosecutor’s office…. [A] heavy feeling of bias and injustice has followed the entire case. As public representatives, we warn that continued proceedings along these lines, leading to this result, is liable to significantly damage public faith in the judicial system.”

Morton A. Klein
National President
Zionist Organization of America

Can you say fiduciary duty? Jewish nonprofits must follow new rules

Based on all reports, the evil criminality of Bernard Madoff has decimated the portfolios of hundreds of individuals and charitable organizations. The consequences for ongoing charitable programs and future gifts will be felt for many years to come.

While there should be no limit to the outrage at Madoff, the Jewish not-for-profit community must recognize that this crisis has highlighted grave shortcomings in professional controls in place related to the investment of their funds. Judging from press reports and public communications from numerous institutions, it seems apparent that the basic standards of fiduciary oversight were not in place. Both professional staff and lay leadership should undertake comprehensive reviews of their policies and take responsibility for their shortcomings.

Complete Madoff CoverageAs the community looks forward, it is imperative that the oversight of investments be executed in a manner that meets the highest fiduciary standards. After all, those responsible for overseeing the investments quite literally have the future of many of the most important programs in the Jewish community in their hands.

The large, often undiversified allocations to Madoff indicate that the foundations fell into the worst pitfalls that trap individuals into unwise investments. Among these are: lack of diversification, belief in “genius managers” who promise to deliver above market returns with minimal risk, not understanding the strategy of the funds in which they invest, investing based on reputation rather than doing due diligence and not monitoring the investment activity. While it is bad enough to find individuals who fall into some or all of these traps, to find evidence that those overseeing large sums for the community were no better is very disturbing, to put it mildly.

It also seems from this affair and my research on the investing policies of not-for-profits that many of these institutions joined with the fad of not-for-profits investing in “alternative investments.” Enticed by the success of Yale and Harvard’s enormous endowments they sought to “be like Yale and Harvard” and invest in hedge funds, private equity funds, venture capital, commodity funds and other products despite little real knowledge or professional staff. Yet even David Swensen, Yale’s esteemed manager, has written that neither individuals nor small institutions should follow Yale’s strategies since they lack the large professional staff and resources required to properly screen and manage such investments.Yale has 19 full time professionals overseeing their investments, Harvard Management has a full- time staff well over 100.

A Business Week article in May 2006, “Big Risk on Campus,” reported on smaller endowments investing like the big guys, noting that larger endowments (averaging $1 billion or more) had an average of 21.7 percent of their assets in hedge funds. In second position in the article’s table of smaller endowments with big hedge fund stakes was Yeshiva University’s $1.1 billion endowment with 65.3 percent. Yale’s allocation to hedge funds is 23 percent; Harvard’s, 18 percent.

Ironically, while many foundations concentrated on seeking out exotic, high-risk “alternative” investments, they did not look into allocating a portion of their investments to a better “alternative,” such as investments that would not have entailed above-average risks. Examples would include: socially responsible index funds, a broadly diversified index fund of Israeli stocks or investments in indices of companies investing in clean energy. The vast majority of foundations ignored the opportunity for “doing well by doing good” in their quest to find a “hot hand” to manage their money.

Looking forward, it is imperative that our institutions draft clear investment policy statements and establish appropriate policies and controls. Ideally, the foundations would wind up with an investment portfolio in line with the “best practices” of investment strategy and not much different than that of a prudent individual: broadly diversified with low cost, transparent and liquid index instruments.The parameters of such policies would include:

  • A target allocation for the portfolio among international and domestic stocks, bonds and cash, along with controls for keeping the portfolio within those parameters.
  • No investments in bonds below investment grade.
  • Restrictions on investments in asset- backed securities.
  • Restrictions prohibiting any investments that make use of leverage or derivatives.
  • Restrictions on investments in illiquid investments, such as venture capital and private equity, and on investments that do not have transparent pricing and valuation.
  • No investments in any entities affiliated with members of the investment committee, the board or the professional staff. As a consequence of this one policy, the New York Jewish Community Foundation had no investments with Madoff.
  • Ability to price all investments in the portfolio on a daily basis. Confirmations of all transactions by the next business day.
  • Transactional activity and financial reporting performed by different individuals.
  • Monthly performance reports available to all investment committee members.
  • Annual audit of all investments and procedures by an independent third party.

In addition to the above, serious consideration should be given to an even higher level of transparency: complete posting on the Internet of the full portfolio and its value and performance. Given the extreme lack of controls evidenced by the Madoff affair, such an easily implemented step would go a long way to restoring confidence in the community and in fact may be essential for any success in raising the funds necessary to keep many programs afloat.

Lawrence Weinman is an independent registered investment advisor working with individuals and institutions. He teaches a course on investment management for nonprofits at the AJU and has worked with Jewish nonprofits in their investment strategies. He blogs at www.sensibleinvestments.blogspot.com.

Madoff scheme deals new hit to FSU Jews

MOSCOW (JTA) — The Ponzi scheme perpetrated by Bernard Madoff is the latest in a string of financial blows to Jewish aid programs in the former Soviet Union, wiping out a major foundation that was the primary funder of Jewish higher education in Russia.

The Chais Family Foundation, a $178 million philanthropy forced to close after investing all its money in Madoff’s fraudulent fund, gave away more than $12 million per year to Jewish causes. About $2.5 million of that focused on the former Soviet Union, where the foundation funded at least 12 cultural and educational programs.

Even before the foundation’s collapse, several organizations — including the Jewish Agency for Israel, Chabad-Lubavitch and the American Jewish Joint Complete Madoff CoverageDistribution Committee — had announced in recent months that they would be reducing support for programming in the region, fueling doubt and fear among Russian Jewish communal leaders.

“Many of my colleagues and others think that 2009 could be the hardest year for the Jewish community of the former Soviet Union,” Mikhail Chlenov, the general secretary of the Euro-Asian Jewish Congress, who also sits on the board of a program that was funded by Chais, told JTA. “Education is the first sphere of work that is already suffering, but social welfare programs could be next.”

Re-creating a Jewish community in the former Soviet Union following the collapse of communism has been an intense project undertaken by the broader Jewish community, drawing hundreds of millions of dollars in recent years from the Jewish Agency, Chabad and the JDC. The Chais Foundation’s annual $2.5 million contribution was the driving force behind creating a sustainable and self-sufficient piece of infrastructure in the region — a higher education system equipped to train Jewish professionals and teachers.

Chais funded the Center for Biblical and Jewish Studies in St. Petersburg, the Jewish studies department at Moscow State University and the Chais Center for Jewish Studies in Russia, which it founded. The Chais Center brings professors from the Hebrew University in Jerusalem to the region to create accredited programs. Hundreds of Jewish professionals have been trained through the center.

In addition, the foundation was a major funder of the Open University of Israel, which transmits online curricula to the former Soviet Union.

Those programs are now in danger.

Arkady Kovelman, the head of the Jewish studies program at Moscow State, said his program could definitely expect to lose some opportunities for grant money.

The Moscow program relies on academics from the Chais Center at Hebrew University who conduct courses in Hebrew and Russian. Kovelman says it is too early to tell if the program will continue or what the loss of Chais money will do to his program.

“I am hoping that it will not have an immediate impact,” Kovelman said. “They are telling us that everything is more or less OK.”

Even if programs in Russia weather the loss of Chais, the foundation’s closing is only the latest in a half-year of calamity for programs in the region pinched by the downturn in the global economy.

The Heftziba system — a network of 41 state-sponsored schools that offer Jewish curricula, which is is administered by the Jewish Agency — is in peril. The system, which was set up by Russian municipalities in conjunction with the Israeli Ministry of Education immediately after the fall of communism, has seen its finances gutted by $40.5 million in cuts to the Jewish Agency’s overall budget.

The agency, which pays to have some 11,000 students bused to the schools, is reducing its funding for the system from $12.7 million in 2008 to just over $5 million for 2009, with the hope that local philanthropists will help pick up the slack.

Alan Hoffmann, the director of the Jewish Agency’s education department, estimates that the Heftziba budget now has a $5 million hole.

“It could really be a mortal blow” to the school system, he told JTA Sunday.

The Jewish Agency already had been forced to adjust after Russian-Israeli philanthropist Arcadi Gaydamak pledged $50 million in 2006 to help establish programming in the former Soviet Union, but then froze the gift after giving only $10 million.

The two other Jewish-run school networks in the region — the secular ORT system and the Orthodox Shma Yisrael — have suffered from cutbacks undertaken by the Jewish Agency. Shma Yisrael has lost $200,000 in funding and the ORT schools are struggling through a budget cut of $1.2 million in recent months, according to ORT officials, JTA reported in November.

In the past three months, the largest Jewish educational network in the region, Chabad’s Or Avner system, has been forced to make significant cutbacks as its main benefactor, Lev Leviev, withdrew a substantial portion of his funding in the face of the financial crisis.

On top of these cuts, the Joint Distribution Committee, which provides social services to the frail and elderly in the region, is cutting its $100 million-plus 2009 budget in the region by about $5 million.

“You put those factors together in one six-month period from June 2008 until January of 2009 and you have some serious dynamite there for some institutions,” Hoffmann said. “I think it is a serious body blow to Jewish life in the FSU.”

The survival of Jewish programming, he said, “will depend on how quickly the world economy improves and the philanthropy world improves.”

U.S. Jewish leaders and Israeli officials have long hoped that the creation of new Jewish wealth in the region would lead ultimately to the formation of a home-grown Jewish philanthropy class that one day could pick up the mantle. But that had been slow in coming, even before the financial crisis and the drop in the price of oil wiped out huge swaths of Jewish wealth in the region.

For a system still largely dependant on outside money, the disappearance of Chais could really hurt.

Outside of higher education, the foundation funneled tens of millions of dollars into several programs aimed at promoting Jewish identity among youth.

Hillel in the former Soviet Union relied on the Chais Foundation for 23 percent of its budget and the ripples of the Madoff scheme have forced its operations “to the edge,” said Hillel FSU director Osik Akselrud.

“Now I don’t know how to find the exit from this situation because we have to cut programs and reduce salaries,” he told JTA at a Hillel staff conference in Baltimore. “I just don’t know what to do.”

Akselrud, like others whose organizations received funding from Chais, received a letter last week saying that he could no longer expect any support from the now-defunct foundation. The letter, which arrived just as he was to fly to the United States, set off a frenzy of meetings to determine how Hillel FSU could stay afloat.

Akselrud is also the chairman for Limmud FSU, an increasingly popular series of educational conferences that began last year. Limmud has plans for two conferences next year, in Belarus and Ukraine, and the Chais Foundation was expected to be a major underwriter of both.

The Sefer Center, an umbrella group that holds conferences and brings together students in Jewish studies from across the region, had relied on the Chais Foundation for 50 percent of its budget, said its director, Victoria Mochalova. She also learned in a terse message last week that her organization would need to look elsewhere for support.

In the face of the bad news, Mochalova predicted that the older generation of Jewish community activists in the former Soviet Union who had built the network from scratch would find a way to get through a decrease in funding.

“We never had a great situation and we have learned how to live in a hard situation,” she said. “For the young it is a big blow to take.”

In the United States, at least one Jewish organizational leader is holding out hope.

“I am not going to predict the future, but today if you go to our JCCs or to Yesod in St. Petersburg, they are full and active and Jewish life is vibrant,” said Steven Schwager, the CEO of the JDC. “They are critical links in building a Jewish community, and some way or other they will find a solution to continue them.”

Pyramid power (not)

Madoff’s Redemption

If you’re an active member of the Jewish community — and perhaps even if you’re not — there’s almost no way to properly digest the Bernie Madoff scandal. It’slike a quadruple shot of cheap vodka that you drink quickly on an empty stomach. You feel disgusted and drunk at the same time.

First, of course, there’s the alleged scale of the swindle. Fifty billion? You can cut that by 80 percent and it would still be an obscene number.

More than dry numbers, though, there’s the sadness we all feel for the tens of thousands of disadvantaged people — Jews and non-Jews — who will now suffer because the organizations that usually help them have been ruined, not to mention the many individuals and families who have lost their life’s savings overnight.

Then there’s the fear of the uncertain — what all this will mean for the future of fundraising and Jewish philanthropy in an already depressed economy, and to what extent the scandal will fuel the fires of anti-Semitism, as well as turn off many Jews to their faith.

Finally, just to add a touch of the surreal, we have a suspect who apparently immediately confessed to his crime. How often does a white-collar criminal who can afford the best legal advice tell the authorities who have come to arrest him that his financial empire is all “one big lie” — and that he has been engaged for years in a fraudulent Ponzi scheme to the tune of $50 billion?

Well, never.

Put all this nasty brew together, and you have a Jewish community that’s reeling with anger, shock, sadness and shame. We can’t speak fast enough to catch up with our emotions. We almost wish the guy would have kept his mouth shut and had his $900-an-hour lawyer give us the usual “my client will vigorously defend himself from these outrageous charges” response — so that at least we would have been broken in gently.

Instead, we got mugged with a sledgehammer.

One of the dangers of being overwhelmed with so much criminal havoc is that we will lose all perspective when trying to draw conclusions. We may feel, for example, that because the crime is so big, our conclusions must also be big.

But let’s remember that there are many things in this story that are not so big.

Bernie Madoff, for one. Here is a gonif who preyed on the weaknesses of his own people and stole money not just from the wealthy, but from charitable organizations. How much smaller can you get?

How many Bernie Madoffs are there in the Jewish community? The truth is, for every Madoff we hear about, there are probably a million honest Jews we never hear about. Madoff may be a disease, but he’s not an epidemic.

Every day, thousands of deals are made in our community, one Jew trusting another Jew and no one getting ripped off. We don’t hear about these, precisely because no one gets ripped off. There’s no doubt we ought to do more due diligence at all levels of Jewish philanthropy, and I’m sure that as a result of this scandal, we will. But let’s not kid ourselves: For as long as there are human beings, trust will play a central role in the affairs of men.

Trust serves as a convenient shortcut for making decisions, but it also serves a deeper human purpose — it strengthens our emotional bonds. It gives us a chance to show loyalty and faith in other people, and when it is reciprocated, we feel a deeper connection.

Complete Madoff CoverageFrankly, what worries me most is not that we will see more Madoff-level crimes of betrayal in our community, but that we so easily ignore the millions of little offenses we regularly inflict on each other. Those little offenses may not rise to the level of illegal behavior, but they have the cumulative power to corrode the human bonds that tie our families and communities together.

I’m talking about the little lies, the hurtful gossip, the verbal abuse, the arrogant looks, the inconsiderate gestures. How many thousands of instances are there every day when one of us will hurt someone — maybe by using hurtful language or breaking a promise or giving a family member the silent treatment? How many numerous opportunities are missed every day to help another person — maybe by bringing soup to a sick neighbor or simply saying something nice to our mothers?

Madoff’s “swindle of the century” is a tragic ethical breakdown for our community, and we should all help to pick up the pieces. At the same time, the scandal can also serve as a wake-up call to remind us of the myriad ethical obligations we have in our own lives and within our own communities.

Our rabbis and educators can lead the way in answering this call. They can start by making it clear to their congregants and students — many of whom will become our future leaders and financiers — that nothing is more important in Judaism than the way we treat one another. Yes, God loves it when we go to shul or study the Talmud or have a “spiritual experience” or contribute to the shul’s building fund. But God loves it even more when we make it our priority to follow the Jewish laws and principles of how we should properly interact with other people.

This is the Judaism of ethics — the only Judaism that every Reform, Reconstructionist, Orthodox, Conservative, Humanist, Chasidic, Renewal, Egalitarian, Ultra-Orthodox and gay rabbi on the planet will unite behind.

It’s the Judaism that Bernie Madoff shunned, but that the aftermath of his scandal may reawaken.

Imagine that. Instead of the Messiah coming down to redeem us, a sleazy villain shows up on Chanukah and shocks us into reasserting that great Jewish ideal of learning how to live an ethical life.

If you ask me, that sounds a lot easier to digest.

David Suissa, an advertising executive, is founder of OLAM magazine, Meals4Israel.com and Ads4Israel.com. He can be reached at dsuissa@olam.org.