Bernard Madoff: Jewish Perspectives

December 19, 2008

By Rabbi Robert H. Loewy


Michael Milken, Jack Abramoff, Ivan Boesky, Meyer Lansky and now we have Bernard Madoff to add to the Jewish Financial Hall of Shame. Historically we Jews have prided ourselves on financial acumen and success. Many of the prominent investment houses of 20th century America bore Jewish names. I believe that we can still be proud. Note how many in the Obama financial team marshaled to respond to the current fiscal crisis are Jewish. These are honorable men and women, who will be striving to do what is right. Then along comes Bernard Madoff, once Chair of NASDAQ, now a name of pain and embarrassment.

How does $50 billion dollars disappear overnight? It doesn’t. Over decades one man has been conning thousands. At this time it is not clear who else was involved. “Bernie,” to those who knew him, was the kind of person people trusted. He was interconnected with an economic strata of America, especially Jewish America, that provided him with unprecedented opportunity. Through word of mouth and friendship networks he was entrusted with enormous sums of money. I know that many of us who are ignorant of finance turn to “experts,” people whom we trust will not steer us astray. That trust was what was so horribly violated.

What did Madoff do? As I understand it, he simply accepted money from individuals and institutions for investment and over time instead of investing, he provided them a return on their dollars by giving other people’s money, a so called Ponzi scheme. I am sure it is much more complicated than that, but the bottom line is that the money they gave him, that they invested for security, safe keeping and future support, is now gone. Perhaps some of it is in secret accounts around the world or spent by Madoff and some can be recovered. But it certainly is not invested or earning interest.

Of particular concern to us as a Jewish community is the estimated $1 billion impact upon the Jewish philanthropic world of which we are rightly proud. His major investors list reads like a who’s who of Jewish institutional and charitable agencies, family funds and numerous prominent Jewish individuals: Yeshiva University- perhaps as much as $100 million in endowment, Steven Spielberg’s Wunderkinder Foundation, Elie Wiesel’s foundation, Hadassah, a Massachusetts Foundation that gave funds for teen Israel trips- now closed, a California fund to assist at risk youth in Israel- closed; 30 million from philanthropist Mort Zuckerman who is involved in cancer care, education, scholarship, food for the poor; The Shapiro Foundation in Boston, which donated $25,000 to us after Katrina lost $145 million; numerous Jewish Federations (Los Angeles Federation $6.4 million, Washington DC- $10 million of endowment lost); along with many individuals who entrusted life savings and retirement to this man.

We are really just beginning to ascertain who has been hurt by this crime. The immediate reality is that programs are being cut, people are losing jobs and there will be a similar ripple effect over the next year as budgets, already stressed by recession, will be decreased.

How can we respond to this moment, other than with shock and disgust? We realize that this is the anti-Semite’s delight. It confirms all their negative stereotypes of cheap Jews, who will cheat their own mother. Of course it ignores all the philanthropy and good that is now lost and is the dominant theme of our community.

We feel great sadness, for this is what we call in Jewish tradition, a “Chilul Hashem- profaning the name of God.” We are proud of communal accomplishments and positive contributions to our world. On Yom Kippur we recite our sins as a community and so when something like this happens, we feel shame as a community, even if we had nothing to do with it. We who are a God intoxicated and God guided people profane God’s name when one of ours does wrong. Judaism provides numerous teachings on thievery, business ethics, caring for the poor, and being responsible with others’ possessions. Madoff’s actions are anything but in keeping with Jewish tradition.

Appropriately we demand “Din- justice.” Bernard Madoff and any others involved should be prosecuted to the full extent of the law and stripped bare of any funds, so they can make up for their sin. Justice also involves determining how the SEC or other supervising agencies failed to safeguard the public and ensure it does not happen again.

Next arises a call for “rachamim- compassion” for the many hurt by this crime. People are suffering and fearful. We can certainly empathize with them. Rabbi Brad Hirschfield of CLAL surprisingly advocates compassion even for Madoff, who he believes was initially helping people with profits. His theory is that when profits decreased, out of shame and arrogance that the all-powerful financial genius could not continue with success, he devised his scheme. My inclination is that Hirschfield is being way too generous of spirit. I’m guessing greed may have been a more powerful impetus for his actions. Regardless of his motivation, compassion may lead to understanding, but not forgiveness.

If this was a member of our immediate family and I have been involved in something similar on a vastly smaller scale, we would try and help. And so aside from anger, incredulity and embarrassment, I suggest that another response for us as individuals and as a community is to step up and fill the philanthropic lacunae that have now been created. There are enormous holes in the Jewish communal network of needs. We did not cause it, but the needs do not go away. We are not billionaires, but whatever we can do, we should. Many have already begun to respond in this way. Of course this could not come at a worse time in our economy. “Chaval- Too bad!” We do not have the option of choosing when crises will arise, but we do have the choice on how we will respond. We are a people who confront adversity with creativity. Let Bernie Madoff’s crimes and shame be transformed into something positive, turning our communal shame into pride.


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