Tuesday, December 16, 2008

Greed and the Madoff mess

According to the most learned of our early rabbis, as expressed in the Talmud (Babylonian Talmud, Shabbos 31a), when we die and are to be judged by the Almighty for how we lived on Earth, we are not checked for how well we prayed, how many mitzvot (commandments) we kept or even how observant we were. Nay, the sages say we are first asked "Were you honest in your business dealings?" It may seem odd, but on closer examination, it makes sense. Whether we are fair with our business clients and come across as ethical and equitable qualifies us as better human beings. If we treat strangers as we would family, then we set the level of ethical behavior in our business dealings as very high, indeed. This, naturally, leads us to consider how a Jew could be so unethical and greedy in his business dealings that he would bring disfavor, disgrace and ruin to so many hundreds of thousands of Jews and Gentiles as Bernard Madoff. For those who have been researching the fallout from the Madoff melee, the figures have been rising daily. There are some Jewish philanthropies like the Robert I. Lappin Foundation that have simply shuttered their doors. The Lappin Foundation's admitted goals were to reverse assimilation and fight interfaith marriage. They did this through teen travel programs to Israel and other programs aimed at heightening Jewish interest. The money to carry on their program has vanished and the foundation felt it had nothing more it could do than terminate its seven employees. Meanwhile other robust, diversified interests hit by the scandal like Yeshiva University and New York Mets owner Fred Wilpon's Sterling Equities are continuing to operate as before the scandal, but all sustained heavy hits. Hollywood mogul Steven Spielberg's Wunderkinder Foundation took a big hit and his Dreamworks Animation SKG partner Jeffrey Katzenberg also reportedly lost millions. Even Nobel Prize laureate Elie Wiesel was reported as one of the victims of the $50 billion fraud. Weisel's Foundation for Humanity was noted as having suffered millions of dollars in losses, perhaps the greatest ignominy to one of the most inspirational voices of the Jewish people. Real estate developer and media tycoon Mort Zuckerman was one of the single investors who reportedly suffered the most. Many Jewish philanthropies headquartered in and around the New York City area are trying to deal with what is clearly a painful prospect at a time when money is especially short and gift-giving is at an all-time low due to the economy. Several Israeli insurance companies such as Clal, Heral, and the Phoenix lost millions, as did Israel's Technion University, which pegged its losses at $25 million. Madoff was a major donor to the UJA-New York Federation, but also was the Chairman of the Board of the Sy Sims School of Business and treasurer of the Board of Trustees at Yeshiva University. Madoff endowed a chair there in he and his wife's name. Madoff, the former president of NASDAQ, bankrolled his name and reputation into a multi-billion dollar concern for almost 25 years. How he got away with this huge Ponzi scheme while wearing the mantle of respectability and veneration as a trusted financial figure remains to be seen. The S.E.C. launched an investigation as early as 1992 on Madoff, but nothing came of it. Even as recently as just a few years ago, investigators could not point to any irregularities in Madoff's books. He managed to keep one step ahead of prosecution, while putting on a grand show and giving everyone the impression that he was a financial wizard. Well, the other shoe has dropped now and the financial fallout may continue to be felt for decades by Jewish philanthropic interests, Israeli corporations and the small investors who were taken in by Madoff's shady business practices. There are many Jews who retired to Boca Raton or in California who have been wiped out by Madoff. Many of them are hoping the 70-year-old Madoff will be prosecuted to the full extent of the law, but they all recognize that nothing the government can do will bring back their funds. Madoff is out on $10 million bail, a figure he was able to post with little or no problem. Some, reeling from the stigma of going from millionaire to pauper are thinking they hope Madoff faces financial ruin too. Still others are hoping he has to answer the question about how fair he was in his business dealings very soon.

No comments: