May 4, 2009

Stanley Chais, the Beverly Hills money manager accused of being a Madoff fund feeder, was already the focus of a $250-million class action lawsuit. Friday, Chais was sued by the court-appointed trustee overseeing the liquition of Bernard L. Madoff investment Securities.

Chais is accused of, among other indiscretions, receiving such “implausibly high” returns that he did know, or should have known, he was involved in a massive Ponzi scheme.

From the NYT DealBook blog:

The complaint asserted that Mr. Chais was a primary beneficiary of the Ponzi scheme for at least 30 years, reaping annual returns on his family accounts that averaged 40 percent and were sometimes as high as 300 percent, The New York Times’ Diana B. Henriques reports.

The various funds he ran for clients — who ranged from family friends to Hollywood aristocrats like Steven Spielberg and Jeffrey Trachtenberg — produced annual returns of 20 to 24 percent, the complaint said.

That was still about twice what most Madoff investors expected.

The trustee, Irving H. Picard, was appointed at the request of federal regulators to recover money on behalf of those who invested with Mr. Madoff.

The suit marks the first time Mr. Picard has accused a supposed victim of the Madoff fraud of receiving special treatment, although he has sued other institutional investors under provisions of the federal bankruptcy code that allow him to challenge payments Mr. Madoff made in the final 90 days of his long-running fraud.

Reached later by an NYT reporter, Chais’ attorney said “it is important to understand that Mr. Chais and his family have suffered astounding and ruinous losses from the Madoff scheme.”

He added that Mr. Chais was “saddened by the trustee’s suit and outraged by the very public way in which the trustee has proceeded,” specifically by including Mr. Chais’s children and their spouses as defendants and referring to Mr. Chais’s grandchildren, “none of whom had any decision-making involvement in the investments,” he said.

Over at Bloggish, Rob Eshman has a good post about Bibi Netanyahu’s surprise pick for Israeli ambassador to the United States. Israel’s most important diplomatic post will be filled not by a politician but author Michael Oren.

Rob writes:

Why did Prime Minister Benjamin Netanyahu select Michael Oren as Israel’s next Ambassador to the United States?

That’s a question many among Israel’s political and religious right are asking in the wake of the Princeton-educated historian’s appointment to the country’s most important and high-profile diplomatic post. “He supported the withdrawal from Gaza,“ one leading activist told me. “I think it’s dreadful.“

Oren indeed supported Israel’s unilateral withdrawal from Gaza, and in a speech last month argued that Israel do the same from the West Bank.

“The only alternative for Israel to save itself as a Jewish state is by unilaterally withdrawing from the West Bank and evacuating most of the settlements.“ he told an audience at Georgetown University in March, when he was a visiting professor there.

As Haaretz reported:

Oren said he supported the disengagement from the Gaza Strip. After they started firing Qassam rockets from Gaza, he said Natan Sharansky asked him if the disengagement wasn’t a mistake.

Oren said he replied that it had not been. The mistake was Israel’s failure to react to the Qassam fire, which sent a message of weakness to the entire Middle East.

But while the appointment’s critic blast Netanyahu for the choice, they may also come to realize that he can be just what Israel needs about now: an articulate, appealing and highly intelligent public spokesman for the cause, as the country attempts to marshal American and international support to confront the existential threat that is Iran.

It was this subject that Oren focused on in his speech yesterday at the Aipac convention in Washington: ““Israel will not remain passive while a government that’s sworn to wipe it off the map acquires the means for doing that,“ said Oren of the notion of a nuclear-armed Iran.

You can read the rest here. On a related note, a new ADL poll found that 66 percent of Israelis would support a military attack on Iran if diplomacy fails.

Last January, I watched Larry Greenfield, then head of the California chapter of the Republican Jewish Coalition, and Andrew Lachman, president of L.A.-based Democrats for Israel, spar over the presidential candidates in townhall forums. Now Greenfield, who has left the RJC, is blogging for The Journal from the AIPAC policy conference and Lachman is getting interviewed by the JTA news crew.

You can watch Lachman in the above video. Here’s a snippet of what Greenfield had to say:

Obama is at best neutral between our democratic ally Israel and her Arab enemies.

He is inexperienced and “off the charts” radical in his approach to the true nature of freedom’s enemies.

Barack Obama is the anti-Ronald Reagan.  Mr. Obama is unrealistic about a dangerous world, and without deep convictions and principles to guide him.

So, here I am again, helping to leverage a successful pro-Israel community to help the United States remain strong as well. One cannot be pro-Israel without coming to understand that America needs to be strong and successful.  Obama has us going in exactly the wrong direction on national security issues.

We overcame Jimmy Carter.  We shall overcome Barack Obama as well.  We had better, because the missile threats are a unique marrying together of terror states and proxy stateless terror groups with modern technology.

It’s amazing how differently Lachman and Greenfield see the same situation.

Shortly after The Christian Science Monitor published my op-ed about anti-Semitism and the financial crisis, I received an e-mail from Neil Malhotra, a professor at Stanford School of Business. Malhotra said that he and a colleague had just done a study on American sentiments surrounding the financial crisis, and that they found that 24.6 percent blamed the Jews a moderate amount or more for the financial crisis.

I mentioned these findings in my cover story last month, “Why Blame the Jews?” This month, Malhotra and Yotam Margalit of Columbia University published their findings and a bit of analysis in the Boston Review. Among the findings, Democrats were almost twice as likely to blame Jews for the financial crisis. College graduates were two-thirds as likely as those lacking a four-year degree.

Malhotra and Margalit explain their methodology and what their findings mean:

Survey results

To assess more deeply whether the tendency among a subset of Americans to blame the Jews is meaningful, we conducted a controlled experiment. The question of interest is whether anti-Semitic sentiments affect people’s thinking about the preferred response to the economic crisis. For example if people associate corruption on Wall Street with Jewish financiers such as Madoff, what is the impact on their views about bailing out big business?

To address this question, we carried out a simple but powerful experiment. Participants in a national survey were randomly assigned to one of three groups. All three groups were prompted with a one-paragraph news report that briefly described the Madoff scandal. The text was the same for all three groups, except for two small differences: the first group was told that Bernard Madoff is an “American investor” who contributed to “educational charities,” the second group was told that Madoff is a “Jewish-American investor” who contributed to “educational charities,” and the third group was told that Madoff is an “American investor” who contributed to “Jewish educational charities.” In other words, group one did not receive any information about Madoff’s Jewish ties; group two was told explicitly that Madoff is Jewish; and group three received implicit information about Madoff’s religious affiliation. In a follow-up question, participants were asked for their views about providing government tax breaks to big business in order to spur job creation.

The responses of the members of the three groups are revealing and disturbing: individuals explicitly told that Madoff is a Jewish-American were almost twice as likely to oppose the tax cuts to big business. Opposition to tax cuts for big business jumped from 10 percent among members of group one to over 17 percent among the members of group two, who were explicitly told about Madoff’s Jewish background. This difference is highly significant in statistical terms. The implicit information contained in Madoff’s charitable history also produced an aversion to big business, but to a lesser degree, with opposition to corporate tax breaks in this case increasing to 14 percent.

This result is most likely not a coincidence. First, when we examine the results of the experiment on Jewish voters, we find that respondents had the exact same policy preferences in all three groups. In other words, the information about Madoff being Jewish only had an effect among non-Jews.

You can read the rest here.

This response isn’t exactly refusing to confirm or deny, but I guess when your past prime minister let slip what everyone already knew—that Israel is a nuclear power—there isn’t much need for smoke and mirrors. From the JPost:

Western policies based on pressuring Iran to give up its nuclear program will fail because they disregard Israeli nuclear capabilities, which is “the first and greatest threat to security in the region,” an Egyptian Foreign Ministry spokesman said on Monday.

Israeli Foreign Ministry spokesman Yigal Palmor categorically rejected that classification.

“If he can quote at least one occasion in which Israel has threatened any of its neighbors with the alleged nuclear weapon, then his statements would gain him credibility,” Palmor said. “Unless he produces evidence to support his claims, these kinds of remarks are completely out of line.”

Read the rest here.

The AIPAC policy conference seems like an odd place for a politician accused of doing inappropriate favors for the pro-Israel organization to be campaigning for exoneration. But there Rep. Jane Harman was yesterday, vowing to clear her name after an NSA wiretap captured her promising to intervene at the Justice Department on behalf of two former AIPAC staffers accused of obtaining and disclosing state secrets. (That case was dropped by prosecutors last week, but not because of Harman).

From The Washington Post:

The California Democrat noted that she had called on the Justice Department to release all the information it had about secretly monitored conversations that involved her.

“I want it all out there. I want it in public. I want everyone to understand, including me, what has happened,” Harman said before a packed auditorium at the opening of the annual policy convention of the American Israel Public Affairs Committee, or AIPAC, the powerful pro-Israel lobby group.

(skip)

Harman has described the wiretap as an abuse of government power. But sources have told The Washington Post that she was not being surveilled; the tapped phone belonged to the suspected Israeli agent, who happened to talk to her.

“I will not quit on this until I am absolutely sure this can never happen to anyone else,” Harman told the AIPAC audience, which warmly applauded her. She said the incident was having “a chilling effect” on members of Congress who “care intensely about the U.S.-Israeli security relationship . . . and have every right to talk to advocacy groups.”

Or how about this extra nugget that MSNBC picked up on:

She described herself as “not a victim,” but rather “a warrior on behalf of our Constitution and against abuse of power.” And she promised that she will “not quit on this, until I am absolutely sure that this never can happen to anyone else.”

At several points, the audience broke into applause. During one of those instances, Harman cautioned, “It ain’t over yet. Clap next year.”