Jewish Reaction to Madoff Scandal

March 20, 2009

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BETTY ROLLIN: These Jewish teachers are celebrating the festive holiday of Purim, which ironically is about Jewish survival. You would never guess from the spirit of the evening that the foundation sponsoring them has just lost practically all its money. The Lappin Foundation in Salem, Massachusetts, one of Madoff’s many victims, has been devoted to keeping Jewish heritage alive.

The foundation for years has sent Jewish teens to Israel, has trained and inspired teachers, and has educated children about all things Jewish. Robert Lappin started the foundation 16 years ago.

ROBERT LAPPIN (The Robert I. Lappin Charitable Foundation): If our children don’t stay Jewish, then our Jewish future effectively disappears. I care very deeply about that because I feel that the Jewish people are a very unique and wonderful family.

ROLLIN: All the foundation’s money, as well as most of Lappin’s own money, was invested in Madoff securities.

Mr. LAPPIN: My portfolio manager from here in Salem called me where I was in Florida and told me that Madoff had been arrested, and, as I recall, there was a long silence as I — because I was stunned. And I said, “Does that mean that we are wiped out?” And she said, “Yes.”

ROLLIN: As a result, the foundation closed its doors. But Lappin’s supporters rallied.

Mr. LAPPIN: I’m surprised and very grateful. There was an enormous outpouring of support and sympathy from the community.

ROLLIN (to Mr. Lappin): From the Jewish community?

Mr. LAPPIN: From the Jewish community, yeah, and also some from the non-Jewish community as well.

ROLLIN (to Mr. Lappin): How did you feel about the fact that the person who swindled you out of your money was Jewish?

Mr. LAPPIN: I can’t tell you how disappointed and terrible I feel that a Jewish person would do that.

Rabbi YITZHOK BREITOWITZ (Woodside Synagogue, Silver Spring, Maryland): I do think that psychologically in the Jewish community we often feel that our fellow Jew would never do that to—and I think that created an atmosphere of trust.

ROLLIN: Among the thousands of Madoff victims, Jewish institutions, charities, and individuals were hit especially hard.

UNIDENTIFIED REPORTER: Anything to say to your victims?

ROLLIN: It’s reported that Yeshiva University in New York lost $110 million; Hadassah Hospital, $90 million. Elie Wiesel’s Foundation for Humanity closed down, as did many others. “Psychopath,” said Mr. Wiesel, “is too nice a word” for Bernard Madoff. [Editor’s Note: According to the Elie Wiesel Foundation for Humanity, the foundation has not closed but is “alive and well and rebuilding.”]

Rabbi Yitzhok Breitowitz says Madoff’s crime is an affront to the Jewish religion.

Rabbi BREITOWITZ: “Hillul Hashem,” which means the desecration and disgrace of God’s name. When a person behaves in such a way that the Jewish people, the Jewish religion, the Torah and ultimately God is treated with disrespect and disdain in the eyes of others, that is considered to be a sin that is much more serious than the particular actions which constituted the sin in the first place. The Talmud in fact tells us when we go up to heaven and give an accounting of ourselves, the very first question that the Almighty asks us is whether we conducted our business affairs with integrity and honesty.

ROLLIN: Rabbi William Rudolph of Beth El Congregation in Bethesda, Maryland:

Rabbi WILLIAM RUDOLPH (Beth El Congregation in Bethesda, Maryland): Money isn’t bad in Jewish tradition. But not taking care of other people’s money is especially a large sin, and it’s a great obligation. There is a great story in the Torah that when Moses was finished building the Tabernacle he had to make a strict accounting of all the materials that he used. This was Moses who was the leader of the people who spoke to God directly and should be beyond reproach.

Rabbi BREITOWITZ: If you are not honest in business, you are not a religious Jew because the same Bible, the same God that requires certain ritual observances — keeping kosher, observing the Shabbat and the like — says you have to be honest in your business affairs.

ROLLIN: If you are Jewish, you also have to give tzedakah. You must be charitable.

UNIDENTIFIED PHONE BANK VOLUNTEER: I was wondering if you’d be willing to donate that or more this year?

ROLLIN: The volunteers at the Jewish Federation annual fundraiser in Washington, DC, are working overtime this year. The combination of the recession and Madoff created a perfect storm.

Dr. MISHA GALPERIN (Executive Vice President and CEO, The Jewish Federation of Greater Washington): We’ve actually done an emergency campaign this year which we are in the middle of — to try to make up for some of the losses.

ROLLIN: Deborah Cohn is a trustee with the United Jewish Endowment Fund in Washington, DC.

DEBORAH COHN (Trustee, United Jewish Endowment Fund in Washington, DC, speaking to audience): For charities, the economic recession and the Madoff losses have combined to produce reduced resources, increase in demand on the charities, a feeling of betrayal by the financial industry and more than anything else a loss of trust in charitable institutions.

ROLLIN: One of the lessons of the Madoff catastrophe is that charities, as do investors, have to be more careful.

Rabbi BREITOWITZ: There is a verse in the Book of Deuteronomy that talks about bribes, and it says the bribe, the financial gain, shall blind the eyes of the wise man, and I think we get blinded with the prospect of some great return — I think he was offering over 10 percent returns on various investments — that impairs judgment; that takes away clarity of thought.

ROLLIN: Finally, the result of Madoff’s actions in the Jewish community is both hurt and the resolve to do what Jews have always done—continue.

For RELIGION & ETHICS NEWSWEEKLY, I’m Betty Rollin in Danvers, Massachusetts.