Jews struggle to come to grips with Madoff

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Jews struggle to come to grips with Madoff
Wed Jan 21, 2009 9:46pm EST

By Martha Graybow

NEW YORK (Reuters) - For American Jews, the Bernard Madoff scandal has not just caused deep financial pain. It also has been deeply personal.

The accused swindler managed money for numerous Jewish charities and wealthy Jews who are reeling from their monetary losses as well as a sense of betrayal that a fellow Jew could have harmed so many people.

"We're still shellshocked," said Rabbi Joshua Hammerman, religious leader of Temple Beth El in Stamford, Connecticut, which describes itself as an Egalitarian Conservative Jewish congregation. "I am sure every synagogue is dealing with it in some way."

Since Madoff's arrest last month, Hammerman's synagogue and other Jewish groups have struggled with how to assess the scandal and what it means for Jews.

Hammerman, who said his synagogue had not itself lost money in the scandal, but has publicly called for Madoff to be excommunicated. He wrote in a letter to the Conference of Presidents of Major American Jewish Organizations that he thinks Madoff represents "something rotten that must be exorcised from our culture and from our midst."

Madoff was charged last month with fraud after authorities said he had confessed to a long-standing $50 billion Ponzi scheme -- a scam in which older investors are paid with money taken from newer ones. He has not yet formally responded to the charges against him in court, and he remains under house arrest in his Manhattan penthouse apartment.

To some in the Jewish community, the high-profile case has stoked fears of a revival of centuries-old stereotypes about Jewish businesspeople -- particularly at a time when many Americans are reeling from the economic downturn, and Israel is the focus of much unpopular opinion because of the conflict in the Gaza Strip.

After Madoff's arrest last month, the Anti-Defamation League said it had seen a raft of anti-Semitic comments on both mainstream and extremist websites, including offensive comments calling Jewish financiers greedy and untrustworthy and others suggesting that only a Jew could perpetrate such a massive swindle.

ROSENBERGS

The scandal should not be viewed as a Jewish one at all -- and Madoff's Jewishness is irrelevant, says real estate investor Mort Zuckerman, who runs a charitable trust that lost about $30 million to Madoff.

Enron's "Kenneth Lay was never identified as a prominent Protestant energy trader," and Illinois Gov. Rod Blagojevich, who faces federal charges of improperly trying to sell the U.S. Senate seat vacated by President Barack Obama, is not referred to as a "prominent Serbian-American" politician, Zuckerman said.

Still, Zuckerman said, no one since Julius Rosenberg, executed in 1953 along with his wife, Ethel, for giving atomic secrets to the Soviet Union, "has so damaged the image and self respect of American Jews."

Zuckerman spoke at a forum on the Madoff scandal last week at the YIVO Institute for Jewish Research in New York, a lively debate featuring experts on Jewish philosophy and money managers including pioneering hedge fund investor Michael Steinhardt and William Ackman, founder of the Pershing Square Capital Management hedge fund.

Steinhardt said he thought fears of renewed anti-Semitism were overblown. When the 1980s insider trading scandals involving junk bond trader Michael Milken and other Jews came to light, he worried about an anti-Jewish backlash that did not happen, he said.

The scandal "came and it went and there was nothing," he said, saying he thinks the same thing will happen with the Madoff case.
nce the chairman of the Nasdaq, Madoff attracted flocks of investors in Long Island, New York and Palm Beach, Florida -- two affluent spots he frequented -- with his reputation as a "can't lose" guru of conservative investing.

He also became a sought-after fund manager for foundations and nonprofits, including Jewish organizations such as Haddasah, Yeshiva University and a foundation established by Nobel Peace Prize recipient Elie Wiesel. Many more investors worldwide found themselves linked to Madoff through their exposure to hedge funds that gave him money to manage.

Hammerman, of Temple Beth El, said that Madoff's alleged crimes are so deep there is no other appropriate response from American Jews than to kick him out of the faith.

He said the fallout has been felt even among those with no connection to Madoff. Among them, he said, is a group of teen-agers from his community who were awarded free trips to Israel two years ago by the Lappin Foundation, a Massachusetts non-profit charity forced to shut its doors last month after losing all of its money to Madoff.

Now, the rabbi said, the teen-agers' travels will forever be tied to the scandal because they unwittingly benefited from Madoff's alleged theft of funds from others.

"It's not enough for organizations and Jewish leaders to continue with business as usual and say how horrible it is what he did," he said. "We must demonstrate to the world and most of all to our own children just how horrible this crime was, and how far it strays from the essence of Torah and Judaism."

(Reporting by Martha Graybow; Editing by Eddie Evans)